Canadians are less likely to purchase a home now than they were at the height of the pandemic, according to the latest Scotiabank Housing Poll.

Twice as many Canadians are putting their plans to purchase a home on hold in today’s economic environment, when compared to the first year of the pandemic and the height of uncertainty in 2020. Of those Canadian surveyed in 2022, 43% said they were putting their plans on hold, compared to 33% in 2021 and 20% in 2020.

Concerns over costs of living, rising interest rates, market instability, and economic uncertainty has most millennials feeling discouraged about their homeownership aspirations. 90% of Canadians aged 18-34 believe that housing prices will continue to increase over the next 12 months, and 62% say they are waiting for housing prices to come down before buying a home. More than half of millennials (56%) say the current economic environment has negatively impacted their finances putting their homebuying plans on ice.

Despite loosening restrictions and employees returning to work, market conditions have motivated even more Canadians to move further away from major cities to get more for their money (35% in 2022 versus 29% in 2021). This is most common amongst younger Canadians, of which half (49%) are considering moving out of their city to get more ‘house’ for their money.

“It’s no surprise that a perfect storm made up of the rising cost of living, housing supply shortages, and increased demand has caused Canadians to feel like homeownership is out of reach,” said John Webster, Head of Real Estate and Secured Lending at Scotiabank. “It’s important that Canadians know that they’re not alone. Many others are going through the same thing, and it’s why more people are looking for sound advice from a trusted source.”

With the market showing no sign of slowing down, more homeowners are choosing to stay put and invest in their existing property. According to the poll, 59% of Canadians are choosing to renovate their existing property instead of purchasing a new home in 2022, up from 56% at the peak of the pandemic in 2020.

Highlights from the 2022 Scotiabank Housing Poll:

Homeowners choosing renovations instead of new locations

  • When compared to the last two years, fewer people are planning to purchase a new home to live in (15% in 2022 versus 17% in 2021 versus 18% in 2020).
  • Most homeowners (59%) are planning upgrades or renovations to their current home within the next two years, 15% are planning to buy a new home/sell their current home, and 10% are planning to buy a leisure/investment property.

Interesting interest rates

  • 51% of Canadians aged 18-34 feel that the threat of rising interest rates has put their home buying plans on hold.
  • Most Canadians are more concerned about the increasing price of goods and services than they are about a potential interest rate hike (81%).

No stopping the suburbs

  • More Canadians (35%) are looking to move out of their city this year to get more out of their money compared to the previous year (29%).
  • More Ontario residents (39%) are considering moving or buying a home out of the city to get more for their money, in comparison to residents of other provinces.

Tips for planning the next step in your homebuying journey

1. Meet with a mortgage advisor who can help you fit your homebuying aspirations and other financial goals into your broader financial plans.

2. Do your research – ask your advisor for information on the mortgage solutions available to you that may have benefits in today’s economy. A financing solution that can meet your changing needs, like the Scotia Total Equity®* Plan (STEP) could help. STEP allows you to split your mortgage into variable rate and fixed rate components, and by adding other credit solutions like a ScotiaLine® Personal Line of Credit, you can gain flexibility and control in a changing interest rate environment.

3. Determine your fixed costs – if you’re considering buying a new property, identify the true costs including closing costs, legal fees, down payments, insurance, and what a rate hike would mean for your monthly payments. If you’re looking to renovate, make sure you calculate all the costs involved, and get an up-to-date quote that considers the price of materials and labour in today’s market.

4. Consider the unexpected costs that may come along with homeownership. While you may have fixed costs and expenses in your plan, you may need additional financing down the line if you want to finish your basement, add an addition on your home or if unexpected renovations pop up. Look for home financing solutions that will support your financial goals, today and in the future. A financing solution like STEP can allow you to gain access to your borrowing power as you pay down your mortgage without needing to refinance.

5. Get a pre-approval by making an appointment with a mortgage advisor or get it completely online with Scotiabank’s eHOME1. A pre-approval is important to understand what you can afford before you begin the home buying process.

6. Get educated – visit the Scotia Advice+ Centre for more advice and listen to the latest episode of Scotiabank’s Perspectives podcast to hear about what’s happening in Canada’s housing market right now, and learn how it could impact your homebuying journey.