First Time Buyers Survey by Royal LePage and Sagen MI Canada

Increasing number of Canadians anxious about missing out on their first home due to an insufficient down payment

Highlights:

• · 75% of first-time homebuyers in Toronto and 69% in Vancouver reported feeling worried that they would not have a large enough down payment to purchase a home (68% and 58% in 2019, respectively)
• · In Montreal, 63% of survey respondents felt worried about the size of their down payment before purchasing their first home, in line with the national average of 62%
• · First-time homebuyers in all regions, with the exception of Alberta and the Prairies, reported higher rates of anxiety compared to the same survey in 2019
• · Nationally, of those who lived with their parents before purchasing their first home, 15% said they delayed their parents’ plans to downsize as a result

TORONTO, May 2021 – A survey^[1] released by Sagen™, the country’s largest private residential mortgage insurer, in collaboration with Royal LePage, Canada’s leading real estate services provider, analyzed key trends among first-time homebuyers who purchased a home within the last two years. Sixty-two per cent of respondents nationwide said that before buying their first home, they worried they might miss out on a property they wanted because of an insufficient down payment. This reflects a five point increase compared to the same survey question in 2019.

“It’s not at all surprising that first-time homebuyers are experiencing anxiety about the size of their down payment,” said Phil Soper, president and CEO, Royal LePage. “Buying a home, especially your first home, is one of the biggest and most important financial investments a person will ever make. While the market is highly competitive for buyers, a real estate agent can help find similar properties in comparable, but more affordable neighbourhoods. Being properly informed and prepared can make the homebuying process easier and more enjoyable.”

While supply has shown signs of improving during the spring market, Soper added that inventory remains low for current buyers, adding more stress to an already challenging process.

Well above the national average, respondents in Canada’s largest urban centres were increasingly worried that they would not be able to afford a down payment, compared to respondents in 2019. Seventy-five per cent of first-time buyers in Toronto reported feeling worried that they would miss out on buying a home because of an insufficient down payment (68% in 2019).  Following Toronto, for the same question, Vancouver reported 69 per cent (58% in 2019) and Montreal reported 63 per cent (60% in 2019).

“Although COVID-19 has impacted first-time buyers across the country, many have been able to save and buy their home sooner than expected,” said Stuart Levings, president and CEO of Sagen. “The hurdle causing anxiety for first-time homebuyers is saving for a down payment in an environment of rising home prices in many parts of the country. While some have parents who can step in, many do not and they are struggling to get into the market.”

When asked to describe their housing situation before purchasing their first home, 25 per cent of respondents nationwide said they lived with parents or relatives (unchanged from 2019). Fifty per cent of those living with family paid rent to their families (43% in 2019), and of those paying rent, 34 per cent said they paid less than the market value (30% in 2019).

Fifteen per cent of respondents who lived at home said that doing so delayed their parents’ own decision to downsize, while a further 15 per cent said their siblings would have to leave the nest before their parents could move. Sixty-three per cent said their parents had no plans of downsizing when they become empty nesters. These results were similar to findings in the 2019 survey. 

2021 Canadian First-time Homebuyer Survey Chart:rlp.ca/table_first-timehomebuyerssurvey

 

British Columbia

Seventy-one per cent of first-time homebuyers in British Columbia expressed feeling worried their down payment would not be enough to get the home they wanted (56% in 2019) prior to purchasing their first property, compared to 69 per cent of respondents in Vancouver (58% in 2019).

“The homebuying process comes with a lot of pressure and anxiety, especially for first-time buyers, but there is still a strong appetite to enter the market,” said Adil Dinani, sales representative, Royal LePage West Real Estate Services. “Young people in Vancouver and across the province have a very positive association with home ownership. While it may be stressful, it remains a desirable milestone for many.”

Dinani noted that the pandemic has given some first-time buyers the opportunity to look outside of Metro Vancouver. With opportunities to work remotely, Kelowna and other parts of the Okanagan have experienced strong demand from this cohort of buyers.

“Still, we’re seeing a tremendous amount of activity in the condo market right now, among those whose employment may not accommodate remote work long-term. Geography is still an important consideration in their search for a home,” said Dinani.

According to the survey, 31 per cent of respondents in Vancouver (36% in 2019) and 28 per cent in B.C. (27% in 2019) lived with parents or other relatives before buying their first home, surpassing the national average of 25 per cent (25% in 2019).

2021 Canadian First-time Homebuyer Survey Chart:rlp.ca/table_first-timehomebuyerssurvey 

 

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

About Sagen MI Canada Inc.

Sagen MI Canada Inc., operating through its wholly owned subsidiary, Genworth Financial Mortgage Insurance Company Canada (doing business as Sagen^TM), is the largest private sector residential mortgage insurer in Canada.  The Company provides mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. Sagen differentiates itself through customer service excellence, innovative processing technology, and a robust risk management framework. For more than two decades, the Company has supported the housing market by providing thought leadership and a focus on the safety and soundness of the mortgage finance system. As at March 31st, 2021, the Company had $8.1 billion total assets and $4.0 billion shareholders’ equity. Find out more at www.sagen.ca.