Roughly 23% of Canadians surveyed say they are likely to purchase a home in the next two years, with 59% saying location is more important than a larger home; rising costs, competitiveness of markets leading to decrease in activity: Royal Bank of Canada

Sample article from our Housing & Economy

TORONTO , March 21, 2022 (press release) –

  • 59% say location is more important than size as we return to normal
  • 22% of mortgage holders haven't considered what they could afford if interest rates rise
  • Average national home buying budget rises by more than $50,000 year-over-year​​​​​​​

Home-buying attitudes are shifting as Canadians get into the post-pandemic mindset. According to the annual RBC Home Ownership Poll, purchase intent is now back to what it was in January 2020 with almost a quarter (23%) of respondents saying they are likely to purchase a home in the next two years, compared to 30% in 2021 and 22% in 2020.

The research also found the need for more space may be taking a back seat with almost three-in-five respondents (59%) saying location is more important than buying a larger home as we return to normal. Only a quarter (25%) say they are willing to be further away from amenities to afford a larger home. For those who rent, more than a quarter (27%) feel less pressure now to buy than during the peak of the pandemic.

"While there is still a significant amount of activity in the market, our research indicates that the rush of Canadians looking to purchase a home over the last two years has subsided and we're now starting to see a move back to pre-pandemic levels," says Andrea Metrick, Senior Director, Home Equity Financing, Acquisition and Distribution, RBC. "Between rising costs and the competitiveness of the market, Canadians may now be taking a step back and setting aside more time to plan and save before making the jump into home ownership."

Stress, spending and rising prices
Of those who say that housing prices have impacted major milestones in their life almost half (47%) say thinking about buying or saving for a home as prices rise is causing stress in their relationship, while the majority (54%) are stressed knowing they may need to buy a home farther away from family and friends. Thirty per cent also say that due to increasing prices they have/will need to live with their parents longer in order to save enough to buy a home.

In addition to current prices, many respondents may be delaying purchasing a home as they continue to feel the financial impact of the pandemic. The survey found that 40% of respondents are feeling financially overwhelmed, while 42% are worried their financial position may deteriorate over the next year. One-in-five (21%) say they are providing financial support to a family member because of the pandemic.

The research also found that almost two-in-five (37%) plan to continue to spend less post-pandemic so they can put the savings towards buying a home, while almost the same percentage of respondents (33%) believe they will struggle to cover the cost of owning a home as they return to pre-pandemic spending habits.

"Buying a home is the largest purchase most Canadians will ever make, so it's natural that it comes with a certain level of stress, especially in today's market," says Metrick. "While home buyers can't control market factors, taking the time to create a plan and understand where they are financially can help them feel more in control of the home buying process."

On the rise: Interest rates, inflation and home buying budgets
While the majority (60%) of respondents are concerned about interest rates rising in the coming year, almost half (47%) say they and/or their family are well-positioned to weather a potential increase. Almost a quarter (22%) of respondents with a mortgage haven't yet considered what they could afford if rates were to rise.

When it comes to rising inflation, 48% of respondents are worried about the impact it will have on their ability to purchase a home, while 54% are concerned it will affect their ability to cover the costs of owning a home.

The research also found there has been a big increase in how much Canadians plan to budget and save for a home. On average, respondents who have a budget in mind if they were to purchase a new home, say their budget would be $506,646, compared to $453,231 in 2021. At the same time, those who already have some savings earmarked for a home purchase say they now have $196,286 on average set aside (up from $177,558 in 2021).

"With the rising costs Canadians are facing, having a clear picture of your finances is a must. An expert can give you advice on planning for rising interest rates, increases in the cost of living and changes to your personal finances or home buying budget," adds Metrick. 

Metrick adds that for those thinking about purchasing a home, understanding the process and knowing what you can afford are important first steps. Whether in person or virtually, RBC mortgage specialists can help give prospective home buyers the certainty and confidence they need every step of the way.

With the help of an RBC Mortgage Specialist or the RBC True House Affordability tool, home buyers can see how much they may be able to afford and learn about different mortgage options.
Ready to sell? The RBC Home Value Estimator helps current homeowners see what their home may be worth today.
With OJO.ca, in collaboration with RBC, home buyers and sellers in major English Canadian markets can simplify the home buying search process with access to personalized search options, insights and a dedicated concierge team, while connecting with local agents and RBC mortgage professionals.
Home buyers can also access helpful articles and resources by visiting discover.rbcroyalbank.com/homes/, including the Mortgage 101 and Home Buying 101 Series.
National and Regional Data Tables

Question

Total

B.C.

Alberta

SK/MB

Ontario

Quebec

Atlantic
Canada

Strongly Agree/Agree Responses

I am likely to purchase a home in the next two years.

23%

23%

28%

20%

25%

20%

19%

As we return to normal, location is more important than buying a
larger home.

59%

61%

62%

53%

61%

56%

52%

I would rather buy a larger home than be closer to amenities.

25%

25%

22%

30%

27%

21%

26%

Renters: I feel less pressure now to buy than during the peak of the
pandemic.

27%

26%

28%

26%

26%

26%

41%

Rising house prices have impacted major life milestones: Thinking
about buying or saving for a home as prices continue to rise is
causing stress in my relationship.

47%

49%

59%

44%

50%

38%

40%

Rising house prices have impacted major life milestones: Thinking
about having to buy a home farther away from friends and family
due to rising house prices is causing me stress.

54%

59%

62%

47%

57%

45%

41%

Rising house prices have impacted major life milestones: I have/will
need to live with my parents longer in order to save enough to buy
a home.

30%

30%

39%

31%

34%

23%

16%

I am feeling financially overwhelmed.

40%

42%

45%

51%

43%

26%

45%

I am worried my financial position may deteriorate over the next
year.

42%

45%

50%

43%

44%

32%

42%

I am providing financial support (or additional financial support) to
my family because of the pandemic.

21%

19%

25%

18%

23%

16%

23%

I plan to continue to spend less after the pandemic so I can put the
savings towards buying a home.

37%

37%

38%

36%

39%

36%

34%

I believe I will struggle to cover the cost of owning a home as we
return to pre-pandemic spending.

33%

40%

36%

33%

38%

22%

33%

I am concerned about interest rates rising in the coming year.

60%

62%

69%

65%

63%

50%

60%

I or my family is well-positioned to weather a potential increase in
interest rates.

47%

45%

47%

44%

48%

51%

36%

Mortgage holder: I haven't yet considered what I could afford if
mortgage rates increase.

22%

22%

24%

15%

24%

19%

26%

I am concerned about the impact rising inflation will have on my
ability to purchase a home.

48%

53%

50%

48%

50%

44%

43%

I am concerned about the impact rising inflation will affect my ability
to cover the costs of owning a home.

54%

57%

58%

54%

57%

48%

54%

Excluding $0 Responses

Have a budget: Average home buying budget if they were to
purchase

$506,646

$692,741

$423,001

$325,399

$653,100

$352,578

$253,672

Currently have savings for a home: Average amount saved for
buying a home

$196,286

$288,451

$201,729

$172,384

$222,516

$125,152

$66,425

 

About The Survey
An online survey of 2,753 Canadians was completed between January 13 to January 29, 2022 using Leger's online panel, LEO. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90%. A probability sample of the same size would yield a margin of error of ± 1.9 per cent, 19 times out of 20. Poll aggregator 338Canada.com gave Leger the highest rating among all polling firms in Canada for the accuracy of its studies. See 338canada.com/pollster-ratings.htm.

About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 88,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.


Media contact
Arjun Lombardi-Singh, RBC Communications

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