Canadian homebuyers are influenced by fear of missing out, perceived impact of foreign investor activity and expectations of future price growth according to a new Housing Market Insight (HMI) report release today by Canada Mortgage and Housing Corporation (CMHC).
The homebuyer motivation survey provides unique insights into the various choices homebuyers make during the purchase process. Moreover, the survey is a superb tool to analyze buyers’ attitudes such as views on future prices and opinions about key drivers of house prices. The report also looks at homebuyer choices, social influences and the incidences of bidding wars as determined using CMHC’s annual homebuyer motivation survey.
- In both Vancouver and Toronto, 48 per cent of homebuyers respectively spent more than they budgeted on their home purchase while only 24 per cent of homebuyers in Montréal exceeded their budget. The data suggests the fear of missing out hypothesis could have an impact on buyers’ budget.
- About 55 per cent of buyers experienced a bidding war in Toronto and Vancouver, which is much larger than the 17 per cent recorded in Montréal.
- In Vancouver, 68 per cent of respondents believe foreign investors have a lot of influence in driving up home prices while 48 per cent of respondents in Toronto believe foreign investors have a lot of influence driving up home prices.
This report gives a deeper look into the results of CMHC’s homebuyer motivation survey initially presented as part of Examining Escalating House Prices in Large Canadian Metropolitan Centres. The survey was aimed at getting a better understanding of key drivers of rapid price growth in key markets. It was sent to 30,000 recent homebuyers in Toronto, Montréal and Vancouver.
“The survey allows us to better understand how home buying is influenced by attitudes and perceptions, giving rise to sustaining local narratives. As we can see, psychological drivers can be at odds with economic fundamental drivers”.
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As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.
Information on this release:
CMHC, Media Relations