Confidence in buying homes is rising despite inflation, with more Canadians seeing it as a good investment
RBC's 30th annual Home Ownership Poll reveals confidence in purchasing a home is rising despite affordability challenges and inflation impacting how Canadians buy homes.
The poll shows that 60 percent of Canadians under 65 believe owning a house or condominium is a good investment, up from 53 percent in 2023.
Additionally, 29 percent are looking to buy in the next two years, an increase from 22 percent in 2023, with two-thirds always dreaming of home ownership.
The research indicates that 50 percent of Canadians say inflation diminishes their ability to save for a home. This challenge is particularly felt by those planning to purchase within the next two years, who have seen a 37 percent decrease in their savings for buying a home.
Among those who have saved, 36 percent are not putting aside money monthly, up from 8 percent in 2023. However, 41 percent of potential buyers believe they can save enough for a down payment within four years.
“Canadians face many headwinds as they look to purchase a home today, whether they are first-time buyers or searching for their next home,” says Janet Boyle, senior vice president, Home Equity Finance & Newcomer Strategy, RBC.
“While affordability anxiety remains, our research found that many home buyers are exploring different approaches to realize their dream of home ownership.”
Canadians are exploring various strategies to cover home ownership costs.
A majority (57 percent) say they would need a side hustle or second job, and over a quarter (27 percent) have had to or would have to live with their parents longer. Almost half (45 percent) also say they would need to overhaul their spending and saving habits.
Family support plays a significant role, with 62 percent saying financial support from family is necessary to buy a home, and 19 percent needing to buy with family or parents. However, 39 percent want to help family members financially but cannot afford to do so.
Most (54 percent) prefer to have family live with them to save money rather than provide financial support directly.
Mounting costs and inflation are pressuring next-time home buyers. Two-thirds (66 percent) of those likely to buy again in the next two years worry about covering home ownership costs, and half (51 percent) are concerned about buying their next home due to inflation.
The research found that three-quarters (76 percent) believe the housing market in their community is overpriced, with 64 percent saying they could not purchase their first home in today's market. The same proportion believes they would need to move out of their current city to buy a larger home.
Newcomers to Canada are eager to buy, with 73 percent having always dreamed of home ownership and 65 percent likely to purchase in the next two years. Most believe there is only a small window to take advantage of lower house prices.
“Whether it's your first or next home, with so many decisions to make, it's easy to feel overwhelmed when thinking about buying a home,” adds Boyle.
“Getting expert advice and having early conversations can help reduce stress and uncertainty. A financial expert can help you build a home buying plan that aligns with your finances, goals, and lifestyle.”
