Canadians perceive a balanced housing market: RBC Home Ownership Poll

For the first time in five years, it’s no longer a sellers’ market, with Canadians reporting the housing market as balanced between buyers and sellers. The make-up of home buyers has also seen a distinct change from the more traditional trend of buying with a partner/spouse. Today, almost as many home buyers reveal they need help and are purchasing or planning to purchase with their family (28 per cent), as those who say they can purchase solo (32 per cent), according to the annual RBC Home Ownership Poll.

In fact, when compared to past years, buying a home with a partner or spouse has been steadily declining (42 per cent versus 49 per cent in 2017), while non-traditional trends, like purchasing a home alone (32 per cent versus 29 per cent in 2017), are climbing.

“We’re seeing a fundamental contrast in who’s at the buying table,” said Nicole Wells, Vice-president, Home Equity Financing, RBC. “There is a surge in confident, in-control solo home buyers and, on the polar opposite end, those who are saying they can’t do it alone and need the assistance of family.”

As Canadians battle with affordability, buying a home and living ‘house poor’ is or has been a reality for four in 10 Canadians (39 per cent). Conversely, over half (51 per cent) say they would not put themselves in the position of being house poor. House poor refers to Canadians who overextend themselves and spend an unusually large proportion of their total income (roughly 30-40 per cent or more) on home ownership, including mortgage payments, property taxes, maintenance and utilities. While nearly all Canadians (92 per cent) admit that mental stress is a potential impact of being house poor, almost half (47 per cent) say it’s worth the sacrifice.

“While many Canadians tell us that house poor may be a reality, it doesn’t have to be. It may require more effort or time upfront, but being more prepared in the home-buying journey can help bring it all together,” says Wells. “Let’s face it, the white picket fence or pride of your name on the deed is a rite of passage and doing it responsibly means there’s still money for the extras in life.”

Even with shifting conditions in the real estate market, 56 per cent of Canadians think it’s better to wait until next year to purchase a home, with affordability at the forefront of this trend. Almost half (45 per cent) of Canadians who said they would wait until next year to purchase a home, are prepared to push the purchase out two years or more (highest among 18-34 year olds, 55 per cent). Of those waiting to buy, 54 per cent have the expectation that house prices will come down (as high as 68 per cent of British Columbians and 58 per cent of Ontarians expect the price of housing to drop) and 47 per cent of Canadians cite uncertainty about the economy as the main reason for waiting.

Canadians remain confident and know what they want

- Eight-in-10 Canadians say a home or condominium purchase is still a good investment (81 per cent).

- Canadians feel it makes more sense to buy than rent (66 per cent).

- Canadians are well positioned to weather a potential downturn in housing prices (71 per cent) or an increase in interest rates (63 per cent).

- More than half of first-time homebuyers (56 per cent) say they may actually buy sooner because of where interest rates are now and concerns of further hikes.