2023
8
Canada Home Buying Market Report 2023
2023-03-10T03:03:06+00:00
OX1170357
3695
161301
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Report
en_GB
“Although recent rates hikes have stressed many mortgage owners, the long-term outlook for housing remains strong. But a market correction is taking place as overheated housing markets cool down in…

Canada Home Buying Market Report 2023

£ 3,695 (Excl.Tax)

Description

“Although recent rates hikes have stressed many mortgage owners, the long-term outlook for housing remains strong. But a market correction is taking place as overheated housing markets cool down in the face of higher interest rates. This price softening is a positive outcome as it represents a shift to more accurate home valuations and helps first-time buyers.”
– Sanjay Sharma, Senior Financial Services Analyst

Some specific points from this Report include:

  • Some 93% of homeowners agree a home is the most important purchase they will ever make.
  • Over three quarters (78%) of consumers would prefer to get a mortgage from their primary bank/credit union.
  • Six in 10 homeowners (59%) conducted the majority of their home search online.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
      • Executive Summary

          • Top takeaways
            • Market overview
              • Outlook on home buying
                • Figure 1: Outlook for home buying, 2023-28
              • Opportunities
                • Strong preference for obtaining mortgage from primary bank/credit union
                  • Mortgage brokers favoured by a majority of younger consumers
                    • Fair amount of interest in purchasing an income property
                      • Four in 10 homebuyers are motivated by pride of ownership
                        • Challenges
                          • Rising rates are a concern for many consumers
                            • Obtaining a mortgage for a mobile home can be a challenge
                            • Market Perspective

                              • New Canadians are a major spur to home buying
                                  • Figure 2: Distribution of foreign-born population by region of birth (projected), 1996-2036
                                • Canada’s population is ageing
                                  • Figure 3: Percentageof 0-14s and over-65s in the Canadian population, 1988-2068*
                                • Impact of ageing population on type of housing
                                  • Inflation is affecting the housing market in different ways
                                    • Figure 4: Changes in Consumer Price Index, December 2019-December 2022
                                  • Bank of Canada raises key interest rate to 4.5%
                                    • Canada’s apartment shortage
                                    • Competitive Developments

                                      • Home sales, prices expected to fall in 2023 as Canadians struggle with rising borrowing costs
                                        • Canada’s new foreign homebuyer ban begins this year
                                          • Digital lender nesto raises 80m
                                          • Marketing Campaigns

                                            • RE/MAX uses vox pop to educate buyers
                                                • Figure 5: RE/MAX Street Smarts (Videos 1-5), October 2022
                                              • HomeEquity and the Legion deliver remembrance again
                                                  • Figure 6: Letters Home by HomeEquity Bank | The Legion, November 2022
                                              • Home Buying: Fast Facts

                                                • Home Buying Overview

                                                  • A fifth of Canadians have bought a home in the past five years
                                                    • Figure 7: Home buying status and intention, 2022
                                                  • Half of 35-44s have a mortgage
                                                    • Figure 8: Home buying status and intention, by age, 2022
                                                  • Higher income earners strongly over-index in home buying activity
                                                    • Figure 9: Home buying status and intention, by household income, 2022
                                                    • Figure 10: Home buying status and intention, Chinese and South Asian consumers vs overall, 2022
                                                  • Majority of home purchase decisions are shared
                                                    • Figure 11: Home purchase involvement, by age and gender, 2022
                                                  • Roughly even split between first-time and non-first-time homebuyers
                                                    • Figure 12: First-time vs experienced home buyers, by age, 2022
                                                • Home Purchase Considerations

                                                  • Three quarters of homeowners considered previously owned homes
                                                    • Figure 13: Type of home considered by homeowners, 2022
                                                  • Higher-income earners and men more likely to prefer new homes
                                                    • Half of non-owners would consider a single-family home
                                                      • Figure 14: Type of home considered by non-owners, 2022
                                                    • Obtaining a mortgage for a mobile home can be a challenge
                                                      • Younger consumers have stronger preferences
                                                        • Figure 15: Type of home considered by non-owners, by age, 2022
                                                    • Home Buying Motivation & Activity

                                                      • Four in 10 homebuyers are motivated by pride of ownership
                                                        • Figure 16: Reasons for home purchase, 2022
                                                      • Space (more/less) is a stronger reason for 18-54s
                                                        • Neighbourhood/city change is a driver for one in four homeowners
                                                          • Proximity to work/family is more of a factor for younger buyers
                                                            • Figure 17: Reasons for home purchase, by age, 2022
                                                          • Relationship change drives one in 10 buyers
                                                            • Recently starting a family influences one in five 18-34s
                                                              • Fair amount of interest in purchasing an income property
                                                                • Figure 18: Home buying and selling attitudes and behaviours (% agree), 2022
                                                              • Younger consumers are more active real estate participants
                                                                • Figure 19: Home buying and selling attitudes and behaviours (% agree), by age, 2022
                                                            • Recent Home Financing Activities

                                                              • One in five consumers started saving for down payment and researched home financing options
                                                                • Figure 20: Recent home financing activities, 2022
                                                              • One in four mortgage holders have refinanced
                                                                • Figure 21: Capital Direct desktop display ad, 2022
                                                              • One in six have switched from variable to fixed-rate mortgage
                                                                  • Figure 22: Meridian Credit Union Facebook ad, 2023
                                                                • Age influences home financing preparation activities
                                                                  • Figure 23: Recent home financing activities (select), by age, 2022
                                                                • One in 10 consumers were pre-approved for a future mortgage
                                                                  • Figure 24: RBC Facebook ad, 2023
                                                                • COVID-19 fuelled a shift away from large urban areas
                                                                • Mortgage Preferences

                                                                  • Strong preference for obtaining mortgage from primary bank/credit union
                                                                      • Figure 25: “I would prefer to get a mortgage from my primary bank/credit union” (% agree), by age, 2022
                                                                    • Mortgage brokers favoured by a majority of younger consumers
                                                                      • Figure 26: “Mortgage brokers offer better mortgage rates compared to direct lenders” (% agree), by age, 2022
                                                                      • Figure 27: True North Mortgage Brokerage Facebook ad, January 2023
                                                                    • Many Canadians agree that having a mortgage hampers their lifestyle
                                                                      • Figure 28: “Having a mortgage significantly hampers my lifestyle” (% agree), by age, 2022
                                                                      • Figure 29: Member surprise and delight, March 2022
                                                                      • Figure 30: BMO Facebook ad, 2023
                                                                    • Two in five consumers would borrow from a private lender
                                                                      • Figure 31: “I would borrow from a private mortgage lender for financing a mortgage” (% agree), by age, 2022
                                                                    • A third of consumers would prefer to obtain a mortgage online
                                                                      • Figure 32: “I would prefer to obtain my mortgage online” (% agree), by age, 2022
                                                                      • Figure 33: Questrade Facebook ad, 2022
                                                                  • Mortgage Attitudes

                                                                    • Rising rates are a concern for many consumers
                                                                      • Figure 34: “I am worried about the impact of rising rates on my mortgage payments” (% agree), men vs women, 2022
                                                                    • Monthly mortgage payments are stretching many younger consumers
                                                                      • Figure 35: “My monthly mortgage payment is more than a third of my after-tax household income” (% agree), by age, 2022
                                                                    • Six in 10 of 18-34s received down payment help from family
                                                                      • Figure 36: “I received help from my family towards the down payment for my home” (% agree), by age, 2022
                                                                    • Mortgage advisors are the preferred option for home financing advice
                                                                      • Figure 37: Sources of mortgage information, 2022
                                                                      • Figure 38: TD Bank Facebook ad, 2022
                                                                    • 18-34s more likely to go to family
                                                                      • Figure 39: Sources of mortgage information (select), by age, 2022
                                                                  • Home Buying Attitudes

                                                                    • Nine in 10 consider home purchase as the most important decision of their life
                                                                      • Figure 40: “A home is the most important purchase I will ever make” (% agree), by age, 2022
                                                                      • Figure 41: Desjardins mobile display, 2023
                                                                    • Most prefer to buy a home requiring only minor renovations
                                                                        • Figure 42: “I would prefer to purchase a home that requires only minor renovations” (% agree), men vs women, 2022
                                                                      • Four in five 18-34s conducted majority of their home search online
                                                                        • Figure 43: “I conducted the majority of my home search online” (% agree), by age, 2022
                                                                      • Younger home owners more likely to feel the burden of responsibility
                                                                        • Figure 44: “Owning a home is too much responsibility” (% agree), by age, 2022
                                                                        • Figure 45: TD Facebook ad, 2022
                                                                    • Appendix – Data Sources and Abbreviations

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

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