By: Penelope Graham, Zoocasa
The hubbub of election season may have passed, but a key part of each major party’s platform remains a main issue for Canadians – the ability to purchase, and own, a home in their local market.
Whether home prices have risen sustainably has been a hot-button topic in the last decade, but particularly in the nation’s largest urban centres, such as Toronto, where the average home price increased over 46% in the last five years to above the $800,000-mark.
In fact, according to a recent national survey conducted by Zoocasa, the vast majority of Canadians – 84% – feel rising home costs are impacting them negatively. Those who rent their homes are even likelier to express this anxiety, at 93%, while even those who are already on the property ladder – 80% – are also in agreement.
That’s led 56% of the population to feel homeownership is the top socio-economic divider in today’s society – and 78% want to see government making its accessibility a top priority.
Let’s take a closer look at the survey highlights.
Incomes Out of Whack with Home Prices
While a significant portion – 31% – of the population feels homeownership remains a coveted life milestone, they’re less inclined to believe it’s possible in their local market. A total of 91% of respondents said they felt incomes failed to keep pace with the growth of real estate prices in their city or town, with 52% of would-be first-time buyers indicating they’d relocate to another municipality if it meant better affording a home.
That’s putting negative pressure on the middle class, say Canadians – a total of 92% feel the issue is preventing them from purchasing their first home.
Rising Prices Put Pressure on Existing Homeowners, Too
While getting into the market is understandably a struggle for first-timers, it’s generally touted that those already on the property ladder stand to benefit from skyrocketing home prices; after all, it’s only building their equity and growing their asset, right?
While 69% of respondents who identify as homeowners agree that homeownership has effectively built their wealth, they say rising real estate prices have put pressure on their wallets, too; 54% say that, as a result, their carrying costs have outpaced their income growth. Perhaps most telling is that 66% said that if they’d need to purchase their current home again in today’s market conditions, they’re not sure they could do so – indicating just how far affordability has eroded in some markets.
Coming Up with a Down Payment is a Challenge
As home prices spiral ever higher, Canadians are having a tougher time keeping up with their savings – the inability to set enough aside to make a home down payment was cited by 58% of respondents as to their largest hurdle to homeownership.
For 68% of this group, it comes down to not earning enough income, while 40% say the’d need a longer savings timeline to pull together the needed funds.
However, as rents continue to grow in tandem with ownership prices, they’re also restricting would-be homeowners from entering the market, with 39% indicting the cost of rent as the main reason they can’t pull together a down payment.
Penelope Graham is the Managing Editor at Zoocasa, a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. Visitors can view real estate listings, including houses for sale in Ottawa and houses for sale in Kitchener, at zoocasa.com or download our free iOS app.