RE/MAX Homebuying Trends Survey identifies Canadian real estate trends
for 2013 and 2014
KELOWNA, BC, Jan. 22, 2013 /CNW/ - Changing market conditions have
triggered a shift in the Canadian homebuyer mix and mindset, a fact
identified and confirmed by the RE/MAX Canadian Homebuying Trends
Survey 2013-2014 released today.
The national survey, hosted on the Angus Reid Forum in December, was
conducted among 1,109 prospective purchasers who intend to buy within
the next 24 months. From consumer demographics to buyer intentions,
the survey provides a snapshot of Canadian homebuyers heading into a
period of moderation. Among the key findings:
Almost one in five purchasers is single
More than two-thirds are second or multi-time purchasers
Four out of 10 purchasers between the ages of 18 to 34 have a
downpayment of 20 per cent or more.
Just over 80 per cent of buyers believe housing values in their area
will rise or remain the same.
"Today's real estate consumer is more experienced and financially
prudent than in the past," says Elton Ash, Regional Executive Vice
President, RE/MAX of Western Canada. "Recent global events—in concert
with new mortgage finance rules—have fuelled a more conservative
mindset that will serve Canadians well moving forward. It seems the
lessons of excess are being heeded."
Who will drive the market?
Second-time and multi-time buyers represent 70 per cent of those serious
about making a move—a trend that emerged in the latter half of 2012 and
is expected to continue over the next two-year period. First-time
buyers will continue to play a role in the market—at 30 per cent— but
this cohort's more experienced counterparts will lead the charge for
housing over the next 24 months.
"Between 2009 and 2011, first-time buyers were the engine driving
housing activity, taking advantage of favourable conditions and a
recovering economy," says Ash. "That changed in 2012, and even earlier
in B.C., as prices reached a breaking point. While equity-rich
homeowners will be the driving force going forward nationally, we could
see a resurgence of first-time buyers in British Columbia, as they take
advantage of softer pricing."
Canadian Homebuyers - The Financial Picture
Spending patterns were conservative for the most part. Thirty-eight per
cent of purchasers indicated they would spend under $250,000 on their
home, while 42 per cent would spend between $250,000 and $500,000, 10
per cent would spend between $500,000 and $1 million and one per cent
intended to spend over $1 million. The singles cohort was most
prudent, with 47 per cent of purchasers intending to spend under
$250,000. Of the buyers spending $500,000 to $1 million, almost half
resided in Ontario, while the remaining 50 per cent were almost evenly
divided between British Columbia and Alberta.
Although 37 per cent of purchasers who own homes are expected to spend
more than the value of their current properties, 23 per cent indicated
that they would spend an equivalent amount on the next buy. Forty per
cent intended to spend less on their new home, with four out of 10 of
those respondents over age 55.
"Serious equity gains have bolstered the level of downpayment homeowners
can put forth," says Ash. "As a result, they're clearly in a stronger
financial position. They're also more cautious, as demonstrated by our
survey findings. Many are downsizing or making lateral moves. A
redefined mindset has the market looking solid through 2013-2014."
Despite all the dire warnings coming from the central bank and other
sources, one of the most surprising findings of the survey was the
fiscal responsibility of Canada's young homebuyers. Four out of 10 (40
per cent) purchasers between the ages of 18 - 34 intended to put down
20 per cent or more on their home.
Not surprisingly, of those putting down 30 per cent or more, 45 per cent
were aged 55 and over. Just seven per cent of purchasers had a
downpayment of five per cent, while 14 per cent indicated that they
were putting down 10 per cent.
The financials of those purchasers intending to buy a home were
relatively sound, with 40 per cent earning between $50,000 and
$99,999. Twenty-four per cent earn $100,000 plus.
Consumer Confidence in Housing Performance
"Canadians remain confident in the future of housing—and this was
demonstrated nationally across all demographics—regardless of income,
gender, age, or location," says Ash. "The level of enthusiasm bodes
well, as a substantial barometer of market health. The outlook is
Overall, 48 per cent of those surveyed believed housing values in their
area would rise in the next 12 months and 35 per cent believed housing
values would remain the same. Ten per cent believed housing values
would decline. Purchasers were most bullish in Ontario, where 85 per
cent indicated prices would remain the same or rise, and least bullish
in British Columbia where 71 per cent believed values would climb or
remain the same. Twenty-four percent of British Columbia purchasers
believed that values would drop in the next 12 months, while just seven
per cent in neighbouring Alberta thought this would come to fruition.
Low vacancy rates and higher rental costs, combined with favourable
interest rates, are the primary impetus for those currently renting
accommodations, and ultimately, behind their decision to buy a home.
At present, 29 per cent of those surveyed rent, while 68 per cent owned
their own property.
The Buyer Pool
Of those purchasing in the next 24 months, 18 per cent are single, 43
per cent are couples, and families account for 33 per cent. Almost half
of single purchasers (45 per cent) are female—confirming suspicions
that women now represent a considerable force in the market. According
to Statistics Canada, the number of women with post-secondary school
diplomas/degrees has increased steadily. In 2011, 72 per cent of women
aged 25 to 44 had completed post-secondary education, as opposed to 65
per cent of men. Income and employment rates among women have also
been on the rise.
"Our REALTORS® have definitely seen an upswing in the number of female homebuyers
active in the market in recent years—and the survey confirms those
anecdotal accounts," says Ash. "In fact, according to Statistics
Canada, homeownership rates for both men and women living alone have
climbed approximately four per cent respectively during the 2001 to
2006 census period. With established careers and financial
independence, successful, young professionals are making their mark."
While the 18-34 cohort represents 37 per cent of buyers, the 35-54
grouping is by far the largest at 40 per cent. The 55-plus category
trails, representing just 23 per cent of homebuyers. The greatest
percentage of younger buyers can be found in Alberta, where they
represent 40 per cent of the purchasing pool. Job opportunities abound
and salaries are generous as a result of a robust economy, and housing
is still relatively affordable in the province. The oldest buyers are
found in Quebec, where they represent 29 per cent of all
purchasers—many of whom may be taking advantage of serious equity gains
realized over the past decade.
The vast majority of purchasers continue to seek out single-detached
homes (53 per cent), while condominiums ranked second at 17 per cent,
followed by both semi-detached/duplex and townhouse/rowhouse each at 11
per cent. Affordability has factored into the equation, especially in
larger centres. Five per cent of purchasers indicated that they were
interested in recreational properties, which bodes well for Canada's
recreational property market moving forward. Properties outside of
Canada are represented as well, but to a lesser extent at two per
cent. This may be indicative of a cooling trend, as rising prices and
fewer opportunities south of the border discourage Canadian buyers.
Commercial properties also made the list, representing one per cent.
Lifestyle and investment were the principle drivers in the decision to
purchase a home. Buyers, for the most part, were interested in larger
properties (17 per cent), updated homes (six per cent), and different
neighbourhoods (11 per cent), while others were intent to downsize to
smaller accommodations (14 per cent). Inheritance (two per cent) was
as a factor in a nominal number of instances.
The breakdown in terms of location was tight nationally, with 35 per
cent of buyers going urban and 32 per cent going suburban. Only 16 per
cent said that they would go rural. Almost half of purchasers aged 18
- 34 indicated that they were going urban. Alberta has the largest
component of urban-bound purchasers at 50 per cent, followed by 38 per
cent in Ontario. The suburbs were a major draw in British Columbia (39
per cent) and Quebec (36 per cent), where purchasers were able to get
more bang for their buck.
To view charts/graphs of the major findings, click here:
British Columbia: goo.gl/W9oxR
The Canadian Homebuying Trends Survey was conducted online from December
5th to December 10th, 2012, among a sample of 1,109 Canadians that are looking to buy a residence in the next 24 months, who
are Angus Reid Forum panel members. The results have been statistically weighted to ensure a representative sample. The
margin of error on the full base — which measures sampling variability — of 2013 respondents is
+/- 2.2%.Discrepancies in or between totals are due to rounding.
RE/MAX is Canada's leading real estate organization with over 19,000
sales associates situated throughout its 750 independently-owned and
operated offices in Canada. The RE/MAX network, now in its 39th year, is a global real estate system operating in 85 countries, with
over 6,324 independently-owned offices and 88,854 member sales
associates. RE/MAX realtors lead the industry in professional
designations, experience and production while providing real estate
services in residential, commercial, referral, and asset management.
For more information, visit: www.remax.ca.
SOURCE: RE/MAX of Western Canada
For further information:
RE/MAX of Western Canada
Eva Blay/Charlene McAdam
Point Blank Communications