Affordability was the most important necessity for the majority of homebuyers this year, according to the Canada Mortgage and Housing Corporation’s (CMHC) annual Mortgage Consumer Survey.
The price of a home also topped the list of must-haves for 80 per cent of buyers who responded. Other key factors were proximity to public transit and the number of rooms in a dwelling.
The type of neighbourhood wasn’t as important and listed as more of a want than a need. Being close to work, outdoor space and family and friends was also more of a priority compared to being near restaurants and entertainment.
Every year, CMHC surveys Canadians across the country to find out their thoughts, attitudes and behaviours about homeownership and the process of buying a home. This year, 1,385 first-time and repeat homebuyers took part, with 17 per cent living in a condo apartment.
Not as many buyers wanted a move-in-ready home this year and only six per cent listed a turnkey home as an essential. There was also a dip in people who purchased the most expensive home they could afford at 60 per cent, compared to 78 per cent in 2018. Nearly one third spent $300,000 to $499,000 on their home purchase and only around one in five buyers spent more than $500,000.
The purchasing process was a cause of concern for almost half of respondents who worried over unanticipated housing costs, living with home expenses and paying too much for the home itself. At the same time, 87 per cent of buyers felt sure about the long-term pay-offs of homeownership and their ability to make mortgage payments.
Since 2018, more Canadians said they rented for a decade or more before buying a home and most did not rent on their own. The majority lived with family and friends before buying, a number that increased 16 per cent since last year.
Increased interest in real estate professionals
Perhaps due to uncertainty, 78 per cent of buyers connected with a real estate agent to help guide them through the process. That’s a significant increase over the 61 per cent of buyers who used an agent in 2018.
There was also a strong increase in buyers’ perceptions of the value of working with a real estate agent. Some of the key reasons for this trend were an appreciation for the advice they received from their agent and their agent’s attentiveness to their specific needs.
More than 82 per cent of all buyers also interacted with a lawyer in 2019, compared to 53 per cent of buyers the previous year.
Impact of stress test rules
The new federal mortgage qualification rules have been in effect for more than a year now. The majority of homebuyers surveyed were aware of this new stress test and 76 per cent said the changes had little or no impact on their decision to buy a home.
Those impacted by the new rules were still able to buy a home using alternative methods, including buying a smaller or less expensive home, cutting back on other expenses or dipping deeper into their savings to come up with a larger down payment.
Nearly 65 per cent felt the stress test rules would help keep Canadian from taking on a mortgage they couldn’t afford later.