Third of Canadians uncertain when buying a home

Concerns about affordability, paying too much, rising interest rates and mortgage qualification top the list: CMHC

Mario ToneguzziBuying a home can be a daunting experience for many people.

A new survey, released on Thursday by Canada Mortgage and Housing Corp., backs that sentiment up.

The agency’s annual Mortgage Consumer Survey said 37 per cent of homebuyers continue to feel concern or uncertainty when buying a home, adding that concerns related to affordability top the list with more than 50 per cent of concerned buyers worrying about paying too much for their home while nearly one-third worry about rising interest rates and mortgage qualification.

“Shopping for a mortgage can be overwhelming so the more information you have, the better your experience. We’ve expanded our survey to give us greater detail on what Canadians want when looking for a mortgage and how they go about the process. We also now have more insight into important groups like millennials and first-time buyers. Ultimately, our hope is to help Canadians get the most out of the mortgage shopping experience,” said Carla Staresina, vice-president of client relationship management with CMHC.

The survey has been conducted since 1999. This year’s survey was of 4,000 recent mortgage consumers, all prime household decision makers who had undertaken a mortgage transaction in the past 12 months. Sixty-eight per cent had renewed their mortgage, 15 per cent had refinanced their mortgage, and 16 per cent had purchased a home with mortgage financing (nine per cent first-time buyers and seven per cent repeat buyers).

Here are some of the highlights from the CMHC survey:

  • when compared to other factors such as type of neighbourhood, proximity to work and overall condition of the home, almost twice as many first-time buyers reported price/affordability as being the most important factor when buying a home;
  • 85 per cent of first-time buyers spent the most they could afford on their home purchase. But 76 per cent are confident that they will be able to meet their future mortgage payment obligations;
  • 60 per cent of first-time buyers and 69 per cent of repeat buyers indicated that, if they were to run into some financial trouble, they would have sufficient assets (investments, other property, etc.) to supplement their needs;
  • about 50 per cent of homebuyers agreed that they would feel comfortable using more technology to arrange their next mortgage transaction; but the majority still agree that it’s important to meet face-to-face with their mortgage professional when negotiating and finalizing their mortgage;
  • 52 per cent of homebuyers were aware of the latest mortgage qualification rules; about one in five first-time buyers indicated that the rules impacted their purchase decision with most opting to decrease non-essential expenses, purchase a less expensive home or use savings to increase their down payment;
  • consumers continue to show confidence in their home buying and mortgage decisions with 80 per cent of home buyers believing that homeownership remains a good long-term financial investment and 66 per cent believing the value of their home will increase in the next 12 months;
  • 22 per cent of first-time buyers were newcomers to Canada and almost 50 per cent of first-time buyers were millennials (ages of 25 and 34), down from 60 per cent in 2017.

Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.

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