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The Home Buying Process - Canada - May 2017

“The majority of Canadians expect proactive government policy intervention to cool overheated real estate markets, with the Greater Toronto Area being the most likely significant source of economic spillover effects if there is a noteworthy market correction.”
– Sanjay Sharma, Senior Financial Services Analyst

This Report discusses the following key topics:

  • Around three in four Canadians believe house prices are over-valued
  • Home purchase reasons are strongly age dependent
  • Young male mortgage holders most likely to be impacted by higher rates
  • Almost half of renters view it as a lifestyle choice

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Around three in four Canadians believe house prices are over-valued
                • Figure 1: Attitudes about the Canadian real estate market, March 2017
              • Home purchase reasons are strongly age dependent
                • Figure 2: Reasons for home purchase, March 2017
              • Young male mortgage holders most likely to be impacted by higher rates
                • Figure 3: Attitudes about mortgages and financing, March 2017
              • Almost half of renters view it as a lifestyle choice
                • Figure 4: Agreement with statements related to renting behaviours, March 2017
              • The opportunities
                • Leveraging branch networks to sell and service mortgages
                  • Marketing the services of mortgage brokers
                    • Digital application apps and other tools to help first-time buyers
                      • What it means
                      • The Market – What You Need to Know

                        • Canadian economy has a strong start to 2017
                          • BC Government’s foreign home buyers tax
                            • Canada’s changes to housing rules
                              • Ontario increases tax refund for first-time home buyers
                                • Ontario unveils new tax on foreign buyers and expands rent control in bid to cool housing market
                                • Market Factors

                                  • Canadian economy has a strong start to 2017
                                    • Housing sector to experience continued growth
                                      • Figure 5: Best- and worst-case forecast value sales of housing, at current prices, 2011-21
                                    • Rental vacancy rate slightly higher
                                    • What’s Working and What’s Not

                                      • What’s working
                                        • BC Government’s foreign home buyers tax: impact on Vancouver home prices
                                          • What’s facing challenges
                                            • Changes to Canada’s housing rules
                                              • Ontario unveils new tax on foreign buyers and expands rent control in bid to cool housing
                                              • What’s Next

                                                • Real estate sales activity in 2017 to mainly decline
                                                  • Impact of new guidelines on the real estate market
                                                    • BC Government’s foreign home buyers tax
                                                      • Ontario increases tax refund for first-time home buyers
                                                      • Key Players – What You Need to Know

                                                        • Alterna Bank introduces Canada's first fully digital mortgage application
                                                          • CIBC releases iPhone app to apply for a mortgage
                                                            • National Bank shuts down its mortgage broker division
                                                              • Mogo moves into the mobile mortgage market
                                                              • Industry Developments and Innovations

                                                                • CIBC releases iPhone app to apply for a mortgage
                                                                  • National Bank shuts down its mortgage broker division
                                                                    • Scotiabank teams up with Toronto AI startup, DeepLearni.ng
                                                                      • Credit Karma crosses the border to Canada
                                                                        • Fintech firm buys home improvement financing assets from TD Bank
                                                                          • Alterna Bank introduces Canada's first fully digital mortgage application
                                                                            • Mogo moves into the mobile mortgage market
                                                                              • Dominion Lending Centres launches ‘Our House’ campaign
                                                                              • Marketing Campaigns

                                                                                • Select campaigns from Mintel Comperemedia
                                                                                  • Scotiabank’s emotional appeal to look beyond rates
                                                                                    • Figure 6: Scotiabank mortgage print advertisement, April 2017
                                                                                  • RBC connects with realtors
                                                                                    • Figure 7: RBC realtor appreciation week print advertisement, April 2017
                                                                                  • PC Financial combines a competitive rate with grocery points
                                                                                    • Figure 8: PC Financial mortgage email mortgage offer, September 2015
                                                                                • The Consumer – What You Need to Know

                                                                                  • Three in ten Canadians have an outstanding mortgage
                                                                                    • Around three in four Canadians believe house prices are over-valued
                                                                                      • Home purchase reasons are strongly age dependent
                                                                                        • Young male mortgage holders most likely to be impacted by higher rates
                                                                                          • Almost half of renters view it as a lifestyle choice
                                                                                            • Most mortgage related transactions are conducted face-to-face
                                                                                            • Home Ownership and Purchase Intention

                                                                                              • Three in ten Canadians have an outstanding mortgage
                                                                                                • Figure 9: Home ownership and purchase intention, March 2017
                                                                                              • Around half of higher income 35-54s have a mortgage
                                                                                                • Figure 10: Mortgage ownership, by age and income, March 2017
                                                                                              • Quebecers more likely to have bought a resale home/condo
                                                                                                • One in three 18-34s intends to buy a home in the next three years
                                                                                                  • Figure 11: Home buying intention (next three years), by age, March 2017
                                                                                                • Around three in four Canadians believe house prices are over-valued
                                                                                                  • Figure 12: Attitudes about the Canadian real estate market, March 2017
                                                                                                • British Columbians and Ontarians most likely to feel the impact of speculators
                                                                                                  • Quebecers relatively less inclined to feel that home ownership for first-time buyers has become unaffordable
                                                                                                    • Six in ten Canadians favour government policy intervention to cool over-heated markets
                                                                                                    • Home Buying

                                                                                                      • Home purchase reasons are strongly age dependent
                                                                                                        • Figure 13: Reasons for home purchase, March 2017
                                                                                                      • TURF analysis
                                                                                                        • Methodology
                                                                                                          • Space and the need for a first home account for about half of the reasons motivating home purchase
                                                                                                            • Figure 14: TURF analysis – Home purchasing reasons, March 2017
                                                                                                          • Women and younger Canadians more interested in paying a fee for a one-stop home purchase service
                                                                                                            • Figure 15: Attitudes about the home buying process, March 2017
                                                                                                          • Older Canadians and women more likely to favour using a real estate agent
                                                                                                          • Mortgage Financing

                                                                                                            • Older mortgage holders more likely to prefer getting a mortgage from their main bank
                                                                                                              • Figure 16: Attitudes about mortgages and financing, March 2017
                                                                                                            • Leveraging branch networks to sell and service mortgages
                                                                                                              • Young male mortgage holders most likely to be impacted by higher rates
                                                                                                                • Marketing the services of mortgage brokers
                                                                                                                  • 18-24s are most open to borrowing from private lenders
                                                                                                                  • Mortgage Channels and Activities

                                                                                                                    • Most mortgage related activities conducted face-to-face
                                                                                                                      • Figure 17: Channels used for mortgage related activities, March 2017
                                                                                                                    • Correspondence analysis for mortgage activities
                                                                                                                      • Methodology
                                                                                                                        • In-person dealings are dominant in mortgage activities
                                                                                                                          • Figure 18: Correspondence analysis, mortgage channels, March 2017
                                                                                                                        • Men perform more mortgage related decision making
                                                                                                                          • Quebecers are less likely to use online channels
                                                                                                                            • Figure 19: Use of online channel for mortgage activities, significant differences, Ontario vs Quebec, march 2017
                                                                                                                          • Older mortgage holders favour in-person mortgage transactions
                                                                                                                            • Figure 20: Use of in-person channel for mortgage activities (select), by age, march 2017
                                                                                                                          • Younger mortgage holders more likely to use the online channel
                                                                                                                            • Figure 21: Use of online channel for mortgage activities, by age, march 2017
                                                                                                                        • Behaviours and Aspirations of Renters

                                                                                                                          • Almost half of renters view it as a lifestyle choice
                                                                                                                            • Figure 22: Agreement with statements related to renting behaviours, March 2017
                                                                                                                          • Around a third of renters are renting as they haven’t saved enough for a down-payment
                                                                                                                            • One in five renters aged 35-54 is wary of the current state of the real estate market
                                                                                                                              • Older renters are less enamoured with home ownership
                                                                                                                                • Figure 23: Agreement with statements related to home ownership, March 2017
                                                                                                                            • Appendix – Data Sources and Abbreviations

                                                                                                                              • Data sources
                                                                                                                                • Consumer survey data
                                                                                                                                  • Consumer qualitative research
                                                                                                                                    • Abbreviations and terms

                                                                                                                                    Companies Covered

                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                    The Home Buying Process - Canada - May 2017

                                                                                                                                    US $3,995.00 (Excl.Tax)