Canadians’ belief in the strength of the real estate market held steady in December, despite concerns around the overall economy, according to the RBC Home Buying Sentiment Poll. High home values also continued to drive potential homebuyers outside of major metropolitan areas in search of affordability and larger properties.
The poll, which provides updates on current perceptions and sentiments related to the Canadian housing market, found that only 18% of Canadians polled stated the overall economy is strong, yet 45% believed in the strength of the housing market. Even though the vast majority of respondents were concerned about the financial impacts of COVID-19 (78%), less than half of respondents polled were concerned about the impact the second wave of the pandemic will have on the real estate market (43%). Moreover, only 19% believe the pandemic has weakened competition within the real estate market and made it easier to buy a home.
The research also found that the majority of Canadians aspire to purchase a new home with their spouse or partner (56%) at some point and would ideally look to buy a detached home (51%). In fact, interest in the detached segment far outpaced all other housing types, with condominiums coming in at a distant second place (18%). Nearly two-in-five respondents who said they are looking to buy a home in the next two years stated they are currently looking to upsize (38%). When asked, Canadians said they were most interested in purchasing property in the suburbs or a commuter city (38%), followed by rural areas (26%). Only 14% of respondents reported they would look to purchase a home in a major metropolitan area.
More than half of respondents also said that home values in their area were unaffordable (59%). With an average Canada-wide budget of $445,237, which falls below the average nationwide home price value1, almost half of respondents polled stated that if they wanted to buy or own a larger home, they would likely have to move out of the city they’re currently living in (45%).
“High home values continue to drive many Canadians further outside of major city centres, both in search of affordability and more space,” said Amit Sahasrabudhe, Vice-President, Home Equity Financing, Products and Acquisitions, RBC. “Many Canadians continue to be financially resilient in the face of the pandemic, and this has carried over into the real estate market. Seen as a pillar of stability, Canadians continue to view home ownership as a worthwhile pursuit and are willing to shift their priorities in order to find affordable property within their budget.”
When asked, 80% of Canadians polled believe that home ownership is a good investment. While the majority of respondents agreed we are currently in the worst period of the crisis or that it has yet to come (79%), over half stated that home values will only go up in the immediate future (52%). In fact, 60% of respondents believe that home values in their area are overpriced and 56% say affordability will only worsen in the near future.
|1 According to CREA, the benchmark composite price for a home in Canada in October 2020 was $643,000.|
Despite concerns around the economy and rising home values, Canadians polled largely said they continue to be on solid financial footing. The majority of respondents polled did not believe they were in a worse financial position in December compared to prior to the pandemic (59%). While over half of respondents have changed their spending and savings habits as a result of COVID-19 (55%), 85% stated they are currently able to pay their bills. Overall, 47% of Canadians polled do not believe the pandemic has made it harder to save money and 54% are confident that better times are not too far off.
“Despite the pandemic, Canadians continue to remain optimistic when it comes to the future and their finances,” concluded Sahasrabudhe. “Many Canadians remain confident in their ability to save and continue to aspire to make their dream of owning a home a reality.”
According to Sahasrabudhe, there are a number of resources Canadians should leverage to help them find the home that’s right for them and their budget:
- RBC’s True House Affordability tool provides a personalized estimate on how much potential home buyers can afford, while RBC’s Home Value Estimator helps determine the estimated value of your current home.
- RBC Homebuyer Advantage is a one-stop resource with step-by-step guides, tools, calculators and special offers to help Canadians every step of the home-buying experience.
- RBC’s Neighbourhood Explorer can help you quickly narrow down your search to find the best areas to live that are most suited to your lifestyle.
- RBC Mortgage Specialists are available by phone to help home buyers through the process.