Are your clients prepared for home-related expenses?

With ballooning house prices and a pandemic that’s creating pent-up housing demand as well as motivating behavioural changes, your clients could be facing unplanned expenses related to housing, recent polls suggest.

For example, clients who are parents of young adults may want to help their children with down payments — and the amounts could be significant, according to a BMO poll.

Conducted by Pollara Strategic Insights in August, the poll found that more than half of first-time homebuyers (56%) will rely on family for financial assistance.

By province, first-timers in B.C. and Ontario were most likely to look for financial help, at 59% and 58% of respondents, respectively.

Among those seeking help from family, nearly one-quarter said they’re looking for $10,000 to $50,000. On average, first-time homebuyers were looking for more than $44,500 in help, the survey found.

A small proportion of respondents were looking for significantly more, however, with 11% expecting to receive more than $100,000 from family.

Millennials expected the most help, with nearly one-quarter (23%) expecting $100,000 or more.

In a release, Hassan Pirnia, head of personal lending and home financing products at BMO, encouraged buyers to be patient during Covid-19 and ensure they can sustain monthly costs associated with being a homeowner.

“We typically advise prospective buyers not to spend more than 30% of their monthly income on housing,” Pirnia said.

Survey results also suggested that first-time buyers may require help deciding on a variable versus fixed-rate mortgage.

A majority of survey respondents (57%) said they’d opt for a fixed rate. Of those first-time buyers looking at variable-rate mortgages, 55% said they’re looking long term and believe they’ll pay less with a variable rate.

With the favourable interest rate environment that currently exists, advisors may want to help such clients assess that belief.

A TD poll suggested that clients may be incurring new home-related expenses — as well as making serious life decisions — because of the pandemic.

For example, clients who are already homeowners may face increased expenses as they adapt their homes to new pandemic-related behaviours, such as remote working or exercising.

The TD survey found that 37% of Canadians are planning to complete (or have completed) significant renovations or repairs. And close to half of survey respondents (45%) either purchased major household items such as furnishing and electronics, or are considering doing so.

The TD survey also found that Canadians are expediting certain decisions related to their homes, which may indicate a need for planning.

For example, survey respondents said they were moving in with a partner (28%) or making significant household purchases (27%) sooner than expected because of the pandemic.

About the BMO survey: The homebuyer survey was conducted online between Aug. 25 and Aug. 31, 2020, with an online sample of 801 adult Canadians.

About the TD survey: Ipsos conducted an online poll of 1,500 Canadians age 18 and older on Sept. 22–24, 2020, and 937 respondents were homeowners. Quotas and weighting were used to ensure that the sample’s composition reflected that of the Canadian population according to the 2016 census.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they don’t randomly sample the population.