Canadians Expecting To Buy Real Estate This Year Fell By A Third

Canadians expect to buy a lot of real estate over the next year, but not even close to last year’s volume. That’s one of the insights in this year’s RBC Home Ownership Poll released this week. Last year the poll showed a massive surge of buyers planning to enter the market, which proved true. This year those expectations fell sharply back to pre-pandemic levels. Complicating the issue further, those who intend to buy don’t exactly have big budgets.

Canadian Home Buying Intentions Fell By A Third

Canadian home buying intentions are falling back to pre-2020 levels. Nearly a quarter (23%) of households said they intend to buy a home over the next two years, falling just over a third from the 36% in 2021. In 2020, the survey taken a few weeks before the pandemic showed 20% intended to buy within the year. BMO estimates the Bank of Canada’s stimulus drove excess sales 30% higher than normal. The decline of intention seems to reflect policy tightening.

Canadians Expected To Buy A Home

The share of Canadians that expect to buy a home over the next two years.

Source: RBC Royal Bank; Better Dwelling.

The national findings were similar for BC (23%) and slightly higher in Ontario (25%). The highest share was in Alberta (28%), where soaring oil prices are fueling a mini-economic boom. 

Canadians Looking To Buy Don’t Have The Budgets For This Market

Those looking to buy a home might not be prepared for the cost of one right now. The national average has a budget of $506,600, while the average sale price is $744,900. In BC, buyers are budgeting a little more at $692,700 but face an average home price of $1,053,400 as of last month. Ditto for Ontario, where the average budget is $653,100 compared to an average price of $1,018,200. Either only low-end buyers are prepared to enter the market, or they’re in for a surprise.

Canadian Real Estate Buyer Budgets Are Coming Up Short

The average budget of those who intend to buy a home over the next two years, compared to the average price of a home in their respective region.

Source: RBC Royal Bank; Better Dwelling.

Half of Canadians Who “Missed A Milestone” Say Home Prices Are Creating Stress

Rising home prices have left many Canadians feeling like they missed life milestones. Of those who missed a milestone, nearly half (47%) said it placed stress on their relationships. Both BC (40%) and Ontario (50%) had similar results, with Quebec (38%) having the least FOMO of all the provinces. 

A Lot of Canadians Plan To Live With Their Parents Longer

Failure to launch? The group that missed a milestone also say they plan to live with their parents longer. Nearly a third (30%) of those impacted say they’ll need to live with their parents longer than expected. BC (30%) was at the average, while Ontario (34%) and Alberta (39%) came in much higher. This might influence the demographic replacement ratio more than understood at this point.

Expect fewer sales than last year, but a relatively normal pre-2020 style market. The difference between budgets and expectations might present a bit of a problem. At the same time, slower price growth is expected to raise inventory levels.