Despite high mortgage rates and mounting affordability concerns, Canadians' dreams of homeownership persists.
A pair of new polls from leading financial institutions has found that owning a home is still considered a "financial milestone" and "great source of pride" for Canadians, although the feat is increasingly arduous and anxiety-provoking.
According to a CIBC survey, owning property remains a top goal for 71% of non-homeowners, although the majority of renters (64%) and current mortgage holders (82%) are concerned about how inflation and rising rates will affect their ability to keep up with costs.
Although the housing market has begun to rebound -- the national average home price has risen by more than $103K since January and sales were up 11.3% month over month in April -- interest rates remain stubbornly high.
As such, two-thirds of homeowners indicated they were likely to stay in their current abode longer than expected, with 40% saying they may consider selling when economic conditions stabilize.
The latter stance was shared by buyers, as revealed by BMO's Real Financial Progress Index. Sixty-eight percent of respondents said they were planning to wait until mortgage rates decline to purchase a home. Another 26% indicated that current rates have affected their decision to move house.
Amongst those delaying their decision to purchase property, 51% were doing so because of economic concerns, with 18% planning to wait until at least 2024. Twenty percent of those surveyed said they were no longer sure when, or if, they'll buy a home.
"Homeownership continues to symbolize real financial progress, success, and security for many Canadians and their families," said Gayle Ramsay, Head of Everyday Banking, Segment and Customer Growth at BMO.
Despite distresses, Canadians continue to save and plan for a new home purchase. Roughly half of respondents to both surveys indicated they plan to use their own savings to purchase a home, while approximately one-fifth expect to receive a financial gift or loan from a relative.
Other means of purchasing property included Tax-Free Savings Accounts (29%, CIBC), the First-Time Home Buyers Incentive (32%, BMO), and proceeds from the sale of their existing home (22%, CIBC).
Of those who are entering the market, the majority are buying a previously owned home (59%) or condo (15%). Only 15% of recent first-time buyers purchased a pre-construction home, and just 7% bought a pre-construction condo.
CIBC and BMO both found generational discrepancies between the feasibility of homeownership. The latter found 68% of respondents feel that buying a home is more out of reach for them compared to their parents, a stance most commonly held by Gen Z (ages 18 to 24), at 71%, and younger millennials (ages 25 to 34), at 69%.
Meanwhile, 79% of respondents to CIBC's survey worried about future home affordability for their children, while 63% said they plan to help their kids with a down payment.
"Many Canadians recognize that homeownership could be out of reach for their children, unless they have help with a down payment," said Carissa Lucreziano, Vice-President of Financial and Investment Advice at CIBC.
Other significant sources of financial anxiety for Canadians, according to BMO, are housing costs, as cited by 71% or survey respondents, concerns about their overall financial situation (81%), and fear of unknown expenses (83%).
As Canadians increasingly delay their foray into the housing market and stray from new home construction, the housing supply shortage has worsened.
According to the Canada Mortgage Housing Corporation, the country will need over 22 million housing units by 2030 in order to achieve housing affordability for all. Given the current rate of construction, Canada is on-track to achieve 19 million units.
