Finance

Real estate: purchase intentions return to their pre-pandemic level

Only 25% of respondents said they were ready to move away from amenities to have a bigger house. Among tenants, 27% say they are in less of a hurry to buy than during the height of the pandemic.

“Although there is still a lot of activity in the market, our survey indicates that, compared to what we have observed over the past two years, Canadians feel less urgent to buy a home. We are now seeing a return to pre-pandemic normal,” says Andrea Metrick, Senior Managing Director, Acquisition and Distribution, Home Equity Lending, RBC.

According to her, this return to “normal” could be due to inflation and competition in the market which forces potential buyers to think more and save more before launching.

Stress and rising prices

Due to the rise in prices, many potential buyers are forced to think about moving away from their loved ones and relatives to buy a house, which causes stress for 54% of respondents. Another 47% say discussions about buying a home have also become stressful due to rising prices and another 30% say this is why they are forced to stay with their parents longer.

The repercussions of the pandemic have also forced many respondents to postpone their purchase plans. Thus 40% of respondents feel financially overwhelmed and 42% fear that their financial situation will deteriorate further this year.

The Survey also shows that 37% of respondents continue to spend less than before the pandemic, particularly in order to save to buy a house, and 33% believe that they will struggle to meet the cost of property when their spending will return to pre-pandemic levels.

“Buying a home is the biggest expense most Canadians will ever make; it is therefore natural that this project causes a certain degree of stress, especially in the current economic climate, explains Andrea Metrick. Even though homebuyers don’t have control over market factors, having a plan and understanding their financial situation can give them some control over the process. »

Interest rates and inflation

The majority of respondents (60%) are worried about rising interest rates. However, 47% of respondents believe they are in a good position to deal with it. Conversely, 22% of respondents with a mortgage said they had not assessed what they could afford to buy in the event of an increase in interest rates.

Almost half of respondents (48%) are also stressing about rising inflation, 54% believe this will impact their ability to buy.

Canadians have significantly increased their budget and savings for the purchase of a home, according to the survey. Respondents who had a budget in mind for the purchase of a home established this budget on average at $506,646, compared to $453,231 in 2021. For their part, those who had already saved a certain amount for the home purchases raised an average of $196,286, compared to $177,558 in 2021.

Andrea Metrick points out that before embarking on the purchase of a home, Canadians would do well to consult an advisor. This can ease their stress and help them figure out what they can afford based on their budget. They could also turn to online tools like RBC’s Real Home Affordability Tool or the RBC Property Estimator for those who want to know the current value of their home.

About the author

on100dayloans

Leave a Comment