The Canadian real estate market has been rapidly changing over the course of this year. There are new provincial policies, taxes, and tougher federal mortgage criteria that have reduced housing affordability and slowed sales.
Despite all this change, however, 2018 has also provided some much-needed stability by cooling rampant urban centres such as the Vancouver real estate market and Toronto condo market back down to more historical levels.
How has this impacted Canadians and their perception of the market? National data collected by a recent Zoocasa.com survey found that there is a recurring trend amongst existing homeowners and those aspiring to become one. Amongst the respondents from the 2019 housing outlook survey, those who identified as long-term homeowners were more optimistic than newer homeowners and renters when it came to the health of the market and their investment.
Renters, in fact, felt less confident overall about market conditions, their homeownership prospects, and their satisfaction with their current home.
Homeownership an Important Canadian Milestone
Though there are now tougher financial thresholds to ownership, the majority of respondents agreed that owning a home is an important life milestone: 81% of long-term owners agreed, followed by 77% of short-term owners, and 63% of renters. The desire to eventually upgrade to a house was also very strong among the renters: 92% intend to eventually buy a home, with 59% planning to do so in the next five years.
There is also a common perception that it is better to take on a mortgage and pay it off then simply paying rent to a landlordâ€”49% of homeowners believe that paying rent is a waste of money, while 36% of renters agree.
Real Estate Still Considered a Great Investment
Despite the cooling sales in Canada, there is still a high level of confidence in investing in real estate amongst those who currently own a home, with 50% of long-term owners and 45% of shorter-term owners in agreement. However, only 16% of renters share this same sentiment.
Overall, 89% of all homeowners disagreed with the statement “I regret becoming a homeowner”, meaning that they still consider real estate to be amongst the safest financial investments: 68% of long-term homeowners and 47% of short-term owners agree with this sentiment. Note that once again, a majority of the renters do not feel the same way, with only 30% agreeing.
Long-term Homeowners Most Satisfied with Current Home
Forty-three per cent of respondents who have owned real estate for more than 10 years say that they consider the residence that they currently live in to be their “dream home”, potentially reflecting on their increased ability to move up in the market, historically low interest rates, and entering the market before home prices increased dramatically over the past five years.
Amongst those who are newer homeowners, only 24% said that it was their dream home, and only 7% of renters indicating something similar.
Anxiety remains high for all of the groups when it comes to current marketing conditions and steepening affordabilityâ€”of those who indicated that they currently do not live in their ideal home, the majority feel that they will never be able to afford to do so if market conditions remain the same: 49% of long-term owners, 47% of short-term owners, and 66% of renters all agree.
Renters also appear to have been hit the hardest by the rising interest rates, with 28% saying that the higher rates would hinder their ability to buy property, compared to only 13% of homeowners feeling the same.
Canadians Feel Government Should Take Action on the Housing Market
At 71%, the majority of Canadians agree that the federal government should be doing more to help with reigning in the runaway home values; 81% of renters agree with government intervention, compared to 64% of homeowners feeling the same. Renters also show the strongest support for programs that help first-time homebuyers get into the market, with 75% agreement compared to 49% from homeowners.
Unsurprisingly, none of the groups support the government raising taxes to accomplish this, with only 20% of homeowners and 41% of renters in agreement.