Results from Canada Mortgage and Housing Corporation’s (CMHC) Mortgage Consumer Survey have arrived and the findings didn’t come as much of a surprise.
As it turns out, price and affordability were top factors for four out of five buyers during their 2019 home purchase. In fact, 80 per cent of residents listed affordability as one of their “must-haves” when considering a real estate purchase.
Colette Kikongi, business planning and reporting specialist for the Crown corporation, told Global News that the new priorities reflected in the survey signaled a change in buyers’ attitudes.
“Before it was just ‘location, location, location’,” says Kikongi. “But now the survey results suggest that people want to take control [of their financial situation] and ensure they are entering the market properly.
READ: Canadian Housing Starts Trended Lower In October: CMHC
Since reports came out earlier this year about Canadians drowning in household debt, a sense of newfound responsibility has taken hold and buyers want to enter the market feeling confidant about their purchase.
And the more inflated the prices become, the harder it is to do that.
In Toronto, where house prices continue to climb, many would-be home buyers feel tentative – hence the trend of renting for years before deciding on a property with a likely 25 year amortization period!
The flip side of not pulling the trigger on a purchase means that buyers continue to rent in a market where landlords keep inching the rents higher. So with Canadian rents continuing to increase, according to the most recent national report from Rentals.com, that leaves residents with even less to squirrel away for a property.
Average rent in Canada currently sits at $1,940 per month – an increase of 5.5 per cent from last year. And for 31 per cent of first-time buyers surveyed by the federal agency, it took almost a decade of renting to save up enough to even begin the process of looking for a house.
READ: Mortgage Stress Tests Boosted Canada’s Financial Stability: CMHC
However, one statistic in CMHC’s survey stood out – the number of buyers spending the maximum amount they could afford fell to 60 per cent in 2019 compared to 78 per cent the year prior.
With news released earlier this year that indicated the sheer volume of urban dwellers who are “house poor” - according to an RBC survey (1 in 4) - it seems that new homebuyers are trying to avoid the trap of high mortgage payments eating up their disposable income.
Other “must-have” factors for purchasers this year included the number of rooms (73 per cent of people) and proximity to public transit (67 per cent).
This year marks the 20th year that CMHC has conducted the consumer survey.
