Fewer Canadians will buy homes: RBC

Four-in-10 Canadians (40%) planning to enter the housing market over the next two years will be first-time homebuyers, finds an RBC poll. The rest are taking a wait-and-see approach, with 15% likely to buy in the next two years, down from 27% last year. This is the biggest year-over-year drop.

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“An unseasonably warm spring, low rates and anticipation of mortgage rule changes may have led many Canadians to move forward their home purchases in the first half of 2012,” says Sean Amato-Gauci, senior vice president, Home Equity Financing, RBC.

He adds, “Our findings suggest confidence in the housing market is still high and young Canadians are the bright spot as they look to buy their first home and seek the advice to do it right.”

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A majority of Canadians (84%) believe a house or condominium is a good investment. Just over half think now is the time to get into the housing market (52%), while fewer believe house prices will be higher at this time next year (43%). More Canadians in 2013 feel the current housing market is in balance 40%, up from 36% last year).

Additional findings:

• 75% feel government changes to mortgage rules will impact or delay prospective homebuyers;
• 49% expect mortgage rates will be the same this time next year;
• 46% of first-time homebuyers cite affordability as a top reason for not buying. Other reasons include: saving for a down payment (32%) and job security (28%);
• 76% turn to their banker for mortgage advice;
• 40% say a bank is their primary source of information, either by speaking directly or using websites and calculators.

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Provincial highlights

British Columbians are evenly divided on whether it makes sense to buy a house now (51%) or wait until next year (49%). One-in-five are likely to purchase a home within the next two years. Residents in BC were more likely than any other Canadian region to forecast lower housing prices in the next year (38%, national: 24%), and are the only residents in Canada that describe the current market as a buyer’s.

Nearly nine-in-10 Albertans (89%) say buying a house or condo is a good investment, higher than the national average (84%), even as home buying intentions have dropped from a year ago (22%, compared with 31%). Almost half (49%) feel their current housing market is balanced, compared to the national average of 40%.

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The majority of residents in Manitoba and Saskatchewan (56%) say it makes sense to wait until next year to buy a home, in contrast to the national average (52%). Still, 88% say buying a house or condo is a good investment.

While a majority of Ontarians (86%) do not expect to buy a home in the next two years, 83% feel a home or condo is a good investment. More than half say it makes more sense to buy now, while 48% prefer to wait until next year.

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Many Quebecers (87%) do not expect to buy a home in the next two years. Given current housing prices, Quebecers were almost evenly split between saying it makes more sense to buy a house now (49%) versus waiting until next year (52%).

Atlantic Canadians are the most likely in the country to say it makes sense to buy now (64%), rather than wait until next year (36%). Confidence in the investment value of a home remains high in Atlantic Canada (81%), just below the overall Canadian sentiment (84%).