Scotiabank poll shows perfect storm of growing living costs and supply crunch has pulled the Canadian dream further away
When compared to the first year of the epidemic and the height of uncertainty in 2020, Canadians are less willing to buy a home now than they were during the pandemic's peak. According to the latest Scotiabank Housing Poll, twice as many Canadians have put their intentions to buy a home on hold in today's economic environment.
Among those who were part of the study conducted in 2022, 43% of Canadians stated they were deferring their plans, compared to 33% in 2021 and 20% in 2020. Fewer people are planning to buy a new home to reside in than in the previous two years (15% in 2022 versus 17% in 2021 versus 18% in 2020).
For most millennials, concerns about growing living costs, rising interest rates, market instability, and economic uncertainty have dampened their hopes of homeownership.
The possibility of rising mortgage rates has prompted 51% of Canadians aged 18 to 34 to postpone their home purchase plans. Ninety percent of Canadians within the same age group expect that housing costs will continue to rise over the next 12 months, and 62% say they will wait for prices to fall before purchasing a home.
According to the poll, the majority of Canadians are more concerned about rising prices of goods and services than a possible interest rate hike (81%). Additionally, more than half of millennials (56%) believe the present economic climate has severely impacted their finances, delaying their ambitions to buy a home.
Despite easing restrictions and employees returning to work, market conditions have prompted even more Canadians to relocate to areas outside of major cities in order to obtain a better deal (35% in 2022 versus 29% in 2021).
In comparison to inhabitants of other provinces, more Ontario residents (39%) are considering moving or buying a home outside of the city to get more for their money.
This is especially prevalent among younger Canadians, with half (49%) considering leaving their city in order to obtain more 'housing' for their money.
With the housing market showing no signs of slowing down, more homeowners are opting to stay put and invest in their current home. According to the survey, in 2022, 59% of Canadians prefer to remodel their existing home rather than buy a new one, up from 56% at the peak of the pandemic in 2020, 15% intend to buy a new home or sell their current home, and 10% expect to buy a leisure or investment property.
"It's no surprise that a perfect storm made up of the rising cost of living, housing supply shortages, and increased demand has caused Canadians to feel like homeownership is out of reach," said John Webster, Head of Real Estate and Secured Lending at Scotiabank.