Canada NewsWire
TORONTO, April 8, 2019
More Canadians are taking a non-traditional approach to buying a home
Many say being house poor may be the reality of home ownership
TORONTO, April 8, 2019 /CNW/ - 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%), as those who say they can purchase solo (32%), 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% versus 49% in 2017), while non-traditional trends, like purchasing a home alone (32% versus 29% 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%). Conversely, over half (51%) 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% or more) on home ownership, including mortgage payments, property taxes, maintenance and utilities. While nearly all Canadians (92%) admit that mental stress is a potential impact of being house poor, almost half (47%) 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%) 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%). Of those waiting to buy, 54 per cent have the expectation that house prices will come down (as high as 68% of British Columbians and 58% 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
Interest rates and Stress Test Guidelines continue to impact buyers
Tips for success when buying a home:
Get expert advice, in person: Buying a home is one of the biggest decisions and purchases you will make in your lifetime, and for some, potentially several times over. Emotions come into play when the stakes are this high and while modern society tends to gravitate to all things digital, in-person interaction throughout the home-buying journey is essential.
"Having someone on the other end of the phone or sitting across the table to provide expert advice in real-time promotes overall knowledge and confidence in the home buying process. Mortgage specialists can assist in setting realistic expectations to determine how purchasing a home fits with both your short- and long-term financial goals. It's a real-life conversation for a big-life transaction," commented Wells.
With the RBC Mortgage Specialist Locator you can find an RBC Mortgage Specialist near you for no-obligation professional advice, personalized service, and fast and easy mortgage pre-approval1.
Do your research: Online tools can get your home buying journey off to a great start by providing information and insights that can inform your decision-making research.
Think beyond face value: Mortgage rate and house price are just the tip of the iceberg. Everyone's financial situation is unique and having a full understanding of your finances, and how they may change in the future, is critical to avoid taking on more debt than you can handle.
About the annual RBC Home Ownership Poll
These are some of the findings of the annual RBC Home Ownership Poll conducted by Ipsos from January 9 – January 21 and February 14 – 15, 2019 on behalf of Royal Bank of Canada, through a national survey of 2,223 Canadians ages 18+ who completed their surveys online. Quota sampling and weighting are employed to balance demographics to ensure that the sample's composition reflects that of the Canadian adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a confidence interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The confidence interval is wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 84,000+ employees who bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 16 million clients in Canada, the U.S. and 33 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-sustainability.
1 The True House Affordability Tool gives you an estimate of the amount of mortgage you may qualify for with us based on the accuracy and completeness of the information provided by you, is for illustrative and general information purposes only and is not intended to provide specific financial or other advice. You should not waive any financing condition based on the results of the True House Affordability Tool. This is not a mortgage approval or pre-approval. You must submit a separate application for a mortgage approval or a mortgage pre-approval and a full credit report.
SOURCE RBC
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