Canadians just aren’t interested in buying homes the way they used to be.
That much is clear from the annual RBC Home Ownership Poll, which was released Monday. It showed that only a quarter of Canadians plan on buying a home in the next two years, down from nearly 30 per cent in 2016.
It’s a trend that comes as Canada’s average home price has climbed to almost $520,000, up 3.5 per cent from a year earlier, according to the Canadian Real Estate Association (CREA).
Many Canadians still believe that buying a home is a good investment, but potential buyers are delaying their purchases in the hope that prices will come down, the RBC poll showed.
“For many Canadians, buying a home is a financial and personal milestone – often the biggest investment one will make,” says Nicole Wells, vice-president of home equity financing at RBC, said in a news release.
“In today’s market, the best advice is to start with understanding exactly how much you can afford and focus on your wants and needs ahead of starting the house hunt. This will help set expectations and get you started on finding the home that fits your budget and lifestyle.”
Respondents to RBC’s poll cited three main reasons why they’re delaying buying a home:
They believe prices will fall (58 per cent)
There’s uncertainty about the economy (51 per cent)
They’re concerned about affordability (38 per cent)
And there are additional concerns about the ongoing costs of owning a home.
Sixty-five per cent believe they could withstand a downturn in the housing market, down from 73 per cent last year. Meanwhile, 57 per cent think they could stand an increase in interest rates, compared to 63 per cent in 2016.
One-third of respondents said they would worry if their mortgage payments went up by 10 per cent or more.
In Ontario, 61 per cent of respondents feel they live in a seller’s markets; in B.C., it’s 60 per cent. At 10 per cent, Alberta was home to the fewest people who believe they live in a seller’s market, while in Atlantic Canada, only 13 per cent feel that way.
RBC’s poll was conducted by Ipsos from Jan. 13 to 25. It spoke to 2,073 Canadians aged 18 and over. The poll was accurate to within +/- 2.5 percentage points, 19 times out of 20.
Meanwhile, CIBC’s Home Buying and Selling poll, also released Monday, offered insight into homeowners’ decisions around their properties, whether they wished to cash in or hold off purchasing another home.
Sixty-two per cent of respondents to this poll said they were reluctant to sell because of the cost of buying another home. Fifty-four per cent of respondents expected housing prices to keep going up and 40 per cent projected that they would drop in the next five years.
That poll gathered its data through an online survey of 3,034 randomly selected Canadians from March 16 to 20. The margin of error was +/- 1.7 per cent, 19 times out of 20. Results were weighed according to age, gender, education and region.
Increasing home prices have stirred so much concern that Dave McKay, the CEO of RBC, has called on all three levels of government to intervene in Toronto and Vancouver’s housing markets.
But Tim Hudak, former leader of Ontario’s Progressive Conservative Party and the current CEO of the Ontario Real Estate Association (OREA), said governments should be cautious when stepping in.
“If the government gets too heavy handed in intervening in the market, they could capsize the market altogether,” he said.
“Ultimately, the way we ensure that home ownership stays within the grasp of millennials and newcomers is to increase the amount of listings in the marketplace.”
Ontario Premier Kathleen Wynne has addressed the problem of housing prices in the past, stating that provincial housing affordability measures would be coming “very soon.”