Real Estate Sector Survey - Québec City CMA - Households Cautious About Buying a Residential Property
Regarding the 18-34 age group:
Intentions to purchase within the next five years
- 44% intend to buy a property within the next five years
- 84% want to buy a single-family home
- 59% want to buy in a suburb
Purchases made in the last five years
- 84% obtained a mortgage the first time they applied
- 32% used the HBP as the main source of their down payment
- 17% opted for a condominium and 83% for a single-family home
QUÉBEC CITY, Feb. 8, 2019 /CNW Telbec/ - The Association des professionnels de la construction et de l'habitation du Québec (APCHQ), the Québec Federation of Real Estate Boards (QFREB) and the Fonds immobilier de solidarité FTQ released the results of a survey conducted by the firm Léger. Last fall's survey focused on buying and selling intentions in the real estate sector. It found that only 20% of households in the Québec City CMA intend to buy a property within the next five years, compared to the provincial rate of 23%. The 18-34 age group showed the most interest in buying as 44% intend to buy within the next five years.
Cautious households who have confidence in their ability to borrow
Even though the Québec City market has favoured buyers since the first quarter of 2015 according to the QFREB, households still seem reluctant to act. In the 2016 survey on buying intentions, 24% of households in the Québec City CMA intended to acquire a property within a five-year period. By 2018, only 20% were planning on buying a property. The same trend is observed in the 18-34 age group. According to the 2016 survey, 47% of this young age group had the intention of making a real estate purchase, while the 2018 survey found that this level had dropped to 44%. Their financial and personal situation in addition to the required down payment are the main reasons for holding back from purchasing.
However, the experience of those who have purchased in the last five years demonstrates that the properties are easily accessible to residents of the greater Québec City region. In fact, 84% of the 18-34 age group who bought their first home in the Québec City CMA obtained a mortgage the first time they applied. Also, 71% of first-time home buyers make a monthly mortgage payment less than $1,000 and one in five households succeeded in making a down payment of 20% or higher.
For all households that have bought since 2013, 77% are comfortable with their level of debt. In fact, 69% have opted for a fixed interest rate. This option is even more popular with the new generation of buyers as 74% have also chosen it. As for households intending to buy within the next five years, 70% feel that they can obtain a mortgage. This is 5 percentage points higher than the Québec average.
"Buyers have the advantage in the Québec City CMA. Prices are rising more slowly, and opportunities abound in the residential real estate market. The region enjoys full employment and households have the means to purchase a property suited to their needs," stated Yanick Desnoyers, Manager of the QFREB Market Analysis Department.
Existing properties are popular
Existing properties attract more potential buyers in the Québec City CMA (61%), since they are perceived as less expensive than a new property. Younger buyers also share this opinion (62%). Single-family homes are the dream for 65% of potential buyers and are favoured by 84% of the 18-34 age group. Note that 59% of millennials stated that they would prefer living in the suburbs rather than downtown. Households in the Québec City CMA anticipate spending an average of $268,300 on a property in addition to $13,800 on renovations.
"The popularity of existing properties is fuelling the vitality of the home renovation sector, especially since the renovation tax credits introduced in recent years are working and have contributed significantly to the growth of this sector. APCHQ considers that such measures could be renewed in the future on a permanent basis. The Association also proposes that a similar program be adopted to stimulate the renovation of private rental housing," declared Paul Cardinal, Manager of the APCHQ Economic Department.
Baby boomers attracted to renting
The survey found that households aged 55 and over have a strong interest in renting (51%) when they intend to sell their property. This trend is stronger in the Québec City CMA than in the Montréal CMA (43%) and for Québec as a whole (42%). The primary reasons baby boomers sell their property are advancing age, the desire to improve their quality of life and to reduce home maintenance.
"The needs of the population are changing; many retirees want less responsibility and more freedom. They see renting as a practical solution, especially if the building is new and offers services such as underground parking, elevators and common rooms. The Québec City market is, in our opinion, conducive to the development of such projects," declared Normand Bélanger, President and CEO of the Fonds immobilier de solidarité FTQ.
Other findings - Québec City CMA
- 89% of all households intending to buy a property within the next five years are homeowners, but jumps to 91% for the 18-34 age group.
- 6% of households want to buy with a view to renting out the property.
- 85% of potential buyers believe that the home warranty is an important factor in choosing a new property.
- In addition to price, the main criterion for selecting a property is its proximity to the buyer's place of work.
- 93% of respondents live within 45 minutes of their workplace.
- 12% of owner-households intend to sell within the next five years.
- 43% of households planning to sell their property do not intend to renovate before the sale.
- 32% of households who purchased a property in the last five years bought a dwelling of 1,000 to 1,499 square feet.
- Households who sold their property owned it for 7.7 years on average.
About the APCHQ
Founded in 1961, APCHQ is a private, non-profit organization that seeks to develop and enhance the professionalism of its 18,000 corporate members, which belong to 14 regional associations. Through technical, legal, administrative and training services as well as government and public interventions, APCHQ helps its members improve their skills and succeed in a highly competitive environment. Furthermore, ACPHQ is mandated to negotiate the renewal of collective agreements on behalf of 14,500 employers in the residential construction sector.
About the QFREB
The Québec Federation of Real Estate Boards (QFREB) is a non-profit organization representing the province's 8 real estate boards and their nearly 13 000-member real estate brokers. Its mission is to support Québec's real estate boards in order to defend, protect and promote the interests of real estate brokers through the provision of services in the areas of professional practices, public affairs and market analysis. The QFREB is guided by an approach centred on collaboration and resource sharing.
About the Fonds immobilier de solidarité FTQ
Created in 1991, the Fonds immobilier de solidarité FTQ promotes economic growth and employment in Québec by strategically investing in profitable and socially responsible real estate projects in partnership with other industry leaders. The Fonds immobilier backs residential, office, commercial, institutional and industrial projects of all sizes across Québec. As of May 31, 2018, it had 46 projects worth $2.9 billion in progress, 50 properties under management, 2 million square feet of land for development and $76.3 million allocated to affordable, social and community housing. The Fonds immobilier is a member of the Canada Green Building Council.
Methodology
The web survey was conducted between October 4 and 19, 2018 from a representative sample of 6,931 French or English-speaking Québec residents, aged 18 or over. In order to be eligible, respondents had to be responsible (or co-responsible) for paying the mortgage or rent of their residence. Quotas were established according to the region: 3,935 respondents came from the Greater Montréal area, 1,315 from the Greater Québec City area while 1,681 came from other areas of the province. In addition, the 18 to 34 target age group was "oversampled" and age-group quotas were established in order to be able to perform a generational analysis. Using data from Statistics Canada, the results were weighted according to age, regions, gender, language spoken in the home, education and presence of children in the household to ensure a sample representative of the entire study population.
SOURCE Fonds de solidarité FTQ
Emilie Hermitte, APCHQ, Cell.: 514 237-7096, [email protected]; Jacynthe Alain, Québec Federation of Real Estate Boards, Tel.: 514 647-8249, [email protected]; Josée Lagacé, Fonds immobilier de solidarité FTQ, Tel.: 514 847-5710, [email protected]
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