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Many younger, would-be buyers in Canada are putting their purchasing plans on pause, a new survey has found.
“The Number 1 reason for delaying is higher interest rates, and the Number 2 is just high home prices in general,” says Lauren Haw, broker of record for Zoocasa in Toronto about the new survey. The Zoocasa poll of 1,600 Canadian adults from generation Z to baby boomers found 69 per cent of respondents who want to purchase have delayed buying a home this year.
Among generation Z — those under age 30 — 70 per cent noted pausing their purchase. For millennials, the percentage fell to 67 per cent.
“They might be a little lower because many have already bought a home,” she says, pointing to Statistics Canada data from this year showing about 56 per cent of Canadians in their early 30s to early 40s now own a home.
The percentage of buyers delaying was even higher among generation X (individuals in their later 40s and 50s) at 69 per cent, while only 46 per cent for baby boomers noted delaying a purchase.
Haw is quick to note, however, that Canadians ages 40 and up typically represent a smaller share of Canadians buyers.
Of all respondents delaying their purchase, about 30 per cent point to higher borrowing costs as the key reason, while a similar percentage cite high prices. Other reasons include the high cost of living, an inability to sell a current home and a lack of inventory.
The survey did not highlight differences by region, but Haw says likely fewer buyers are delaying their purchase in Alberta.
“Edmonton and Calgary are really shining stars in the Canadian real estate market right now.” Edmonton is notably more affordable than most major cities, even Calgary, but many younger buyers are still having to adjust to a new market reality, says realtor Tom Shearer, broker/owner of Royal LePage Noralta Real Estate in Edmonton.
“During the pandemic when interest rates were so low, single-family detached homes were way more attainable for a first home,” he says.
“But now with higher interest rates and higher cost of real estate — especially in larger markets — it’s not possible to do that anymore.”
Price-wise, Edmonton remains very affordable, he adds.
The benchmark price for an Edmonton home was about $380,000 in September, down about one per cent from last year, while the price of a single-family detached home was $436,600, down less than one per cent, Realtors Association of Edmonton statistics show.
In contrast, Calgary’s benchmark price for all homes was $570,300, up nearly nine per cent, and the single-family home benchmark was $696,100, up about 11 per cent.
Despite Edmonton’s relative affordability, higher borrowing costs mean first-time buyers must save longer to get into their typical first choice, a single-family detached home, even though other segments are much less pricey, Shearer says.
“You can get a great condo for less than $200,000 in Edmonton — very easily,” he says about the city’s least costly housing segment with a benchmark price last month of $182,500.
Year over year, condominiums’ benchmark did increase slightly, RAE statistics from September show.
That modest growth could point to the segment seeing more traction as would-be first-time buyers see their rents rise with inflation, and many more may soon consider doing the same, Shearer adds.
“Eventually, they will decide that they want to be more in control of their destiny and make the change to homeownership.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
