Canadians anxious about homebuying, unpredictable market and affordability: mortgage survey

A record-high number of non- home owners believe they will never be able to buy a family home, at 33 per cent, according to a survey released by Mortgage Professionals Canada.

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The State of the Housing Market report: 2022 Year-End Consumer Survey and Outlook found that Canada’s housing market has undergone a dramatic shift since the middle of 2022, with home prices down and interest rates up significantly.

“We see this across the economy with GDP growth at zero in the last quarter of 2022 and new mortgages down among the chartered banks. There is broad anticipation for how the Bank of Canada will take account for this in its interest rate announcement tomorrow,” said the organization.

“All of this has led to far more Canadians who are anxious about inflation and their family’s finances, which was close to 60 per cent at the end of 2022. This is up 20 per cent from just six months earlier. The rapid decline in affordability—thanks to both high home prices and now high interest rates—has played a central role in Canadians’ view towards homebuying. The survey revealed a record-high number of non-owners believe they will never be able to buy a family home, at 33 per cent, growing by eight points in just six months and a whopping 15 points year-over-year.”

But the organization said Canadian homeownership demand remains strong as close to 80 per cent of respondents see real estate as a good long-term investment, virtually unchanged from previous surveys.

• 69% of mortgage holders had fixed-rate mortgages in 2022
• 25% of mortgages that have variable or adjustable rates
• 3-in-10 variable-rate holders are actively planning or considering a fixed-rate. Another third (35%) considered but decided against.
• 47% of Canadians say a rate increase of up to 20% would cause them to experience mortgage payment difficulties. Among recent first-time buyers, 14% report already having difficulty with their payments.
• 49% of mortgage holders expect to renew their mortgage within the next three years

• First-time buyers (45%) are most likely to use the services of a mortgage broker, as well as those between the ages of 18-34 (40%)
• Broker customers receive more than 50% as many quotes as bank customers, providing more choice to best meet their needs (2.6 versus 1.7)
• 77% of broker customers are likely to use the same professionals upon renewal or renegotiation of their mortgage

• 7%: The projected pace of household mortgage credit growth in 2023
• 30%: The estimated peak-to-trough drop in house prices in 2022-23

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)