Canadians want to be homeowners but not if they have to cut saving

Today’s first time buyers want to have their cake and eat it according to new research from BMO.

It found that getting on the housing ladder is still a priority for many Canadians – although many feel that will never happen - but buyers want to achieve a balance between owning a home and maintaining savings and other lifestyle goals.

Despite the current surging nationwide house prices, the bank’s Pollara-conducted housing survey found that 92% of respondents want to have money left over from their home purchase to do the things they enjoy, such as travelling and shopping.

Nine in ten first-time buyers said they want to balance their monthly mortgage cost with the ability to save regularly.

However, desire to become homeowners is likely to override worthy intentions with around two thirds of respondents indicating that they will stretch their wallets to buy a home even if that derails their saving aims.

BMO’s head of home lending products, Hassan Pirnia, said the lender advises buyers not to spend more than 30% of their monthly income on housing.

Changing priorities

The BMO survey also highlights how people’s choice of where to live has changed in the past year.

Almost half of first-time buyers want to live in the suburbs or smaller cities, with affordability and the ability to buy a larger home driving those views. Detached homes are the preference for most.

For those looking in urban centres, being close to work or their current area are the main reasons. 

"With remote work expected to continue over the long-term, first-time homebuyers have the flexibility to look for a home that isn't necessarily next door to where they work," added Pirnia. "Between this added work flexibility and price appreciation in some major cities, the expectation is that we will continue to see a push into the suburbs.”

While the housing market is hot right now, some economists are increasingly concerned about the potential for a housing market bubble.