Canadians want to buy a home despite COVID challenges
Canadians are facing financial uncertainty amidst the ongoing COVID-19 crisis. However, a recent survey shows more people in the country have plans to purchase a home post-coronavirus. According to a Mortgage Professionals Canada (MPC) report, both non-homeowners and existing homeowners are increasingly likely to seek a new home.
Nine per cent of homeowners say they plan to buy a home within a year of the COVID-19 crisis ending, a 7% increase compared to the end of 2019. Amongst Canadians currently renting, 14% have plans to purchase a home, also a 7% increase.
Perhaps the big question to ask is why Canadians are looking to commit to purchasing a new home during what many predict will be a significant financial downturn. Well, for 38% of homeowners taking the survey, the biggest factor is their home no longer suits their needs. Also, 10% of participants point to favourable low interest rates as a reason.
For non-homeowners, the reasons for moving towards a purchase and seeking a mortgage include living in a nicer area (28%), and again low interest rates (12%).
While the results suggest Canada’s housing and mortgage markets may emerge from COVID-19 more stable than expected. However, there’s a difference between wanting, and even planning to buy a home, and being able to.
Twenty per cent of homeowners who took the survey say their income has decreased during the crisis. For 5%, their impaired financial situation would mean they will only make infrequent mortgage payments or only a part of the payment. Also 2% say they would be unable to pay their mortgage at all.
While this suggests there is a section of Canadians who will be priced out of buying a home in a post-COVID world, most potential homeowners will not be affected.
“What we have seen clearly is that the vast majority of homeowners are not feeling a long-term financial impact related to COVID-19,” said Paul Taylor, President and CEO of MPC, adding that “potential homebuyers are still very much in the market for a home, signs of which are being seen in regions across the country.”
Of course, almost any financial discussion now needs to be held under the looming shadow of COVID-19. In the survey, MPC looked at how the pandemic, subsequent lockdown, and ongoing economic downturn has impacted the housing needs of Canadians.
During the pandemic, an increase of work from home activity has happened. While this was mandatory during the crisis, there could be an ongoing trend towards a permanent subsection of home workers. For many respondents, working from home has highlighted the limited space at their disposal.
“The responses suggest that, to this point, COVID-19 has had some effect on people’s desire to move,” Will Dunning, the author of the MPC report, adds. “The most substantive COVID-19-related reason is that 12% of owners who expect to move indicated that working at home more is resulting in a need for more space.”
Renters agree, with 24% saying their current dwelling “isn’t conducive to the inclusion of a dedicated work area.”