The road to homeownership is a long one for some Canadians, a new report from the Canada Mortgage and Housing Corp. suggests.
Thirty-one per cent of recent first-time buyers surveyed by the federal housing agency said they rented a home for a decade or more before buying a property.
And the portion of those who delayed making a purchase is on the rise — this year’s figure represents an increase of nine percentage points over last year.
Affordability, in general, was a key theme in the 2019 Mortgage Consumer Survey, released on Friday.
Eighty per cent of respondents said affordability or price were their “must-haves” when it came to choosing a property. (The other top answers were number of rooms at 73 per cent and proximity to public transit at 67 per cent).
The focus on cost suggests a shift in priorities has taken place, says a spokesperson for CHMC.
For years in the industry, it was all about “location, location, location,” said Colette Kikongi, business planning and reporting specialist for the Crown corporation.
In what Kikongi described as one of the survey’s biggest takeaways, a majority of buyers (60 per cent) said they paid the highest amount they could afford for their new homes. That figure may sound high, but it’s down from 78 per cent last year.
That result also speaks to concerns around affordability for buyers.
“They want to take control of (their financial situation) and ensure that they are entering the market properly,” Kikongi said.
When it comes to why more than a third of Canadians aren’t buying homes for 10 years or more, Kikongi said there were a few factors possibly at play.
In addition to the common concerns about price, the survey data showed an increase in uncertainty when it comes to buying a home and related costs, she said.
The trend of delayed homeownership is occurring against a backdrop of rising housing costs, a phenomenon felt sharply in cities such as Toronto and Vancouver.
According to the most recent Rentals.com national report, the average rent in Canada was $1,940 per month in October, an increase of 5.5 per cent over the previous year.
For some, these increasing rental costs mean there’s less to squirrel away for a down payment.
At the same time, the price of a home has risen in Canada’s biggest cities, so scraping together the minimum five per cent down payment is getting harder.
A 2016 report found it takes the average person about twice as long to shore up the cash needed for a down payment than it did just 15 years ago.
A more recent report from Toronto puts it another way.
Zoocasa.com used recent condo sales and rental data to calculate how many months of rent would be the equivalent of a down payment on a condo in 35 Toronto neighbourhoods.
The average was 14.7 months worth of rent, or nearly $38,000.
CHMC, a federal agency that offers mortgage insurance and executes Canada’s national housing strategy, has been conducting the Mortgage Consumer Survey for 20 years.
The results were collected via an online survey of 1,385 participants in all regions of the country. Just over half were repeat buyers, and the rest were first-timers.