Canadian Homebuyers insights

First-Time Buyers

• 49% of first-time buyers are Millennials (25-34 years old).
• 40% are married.
• 80% are employed full-time.
• 61% purchased a single-detached home.
• 26% have a household income of $60k – $90k.
• 22% are newcomers to Canada.

Repeat Buyers

• 31% of repeat buyers are Gen X (35-44 years old).
• 59% are married.
• 65% are employed full-time; 7% are self-employed.
• 71% purchased a single-detached home.
• 27% have a household income of $125k or more
• 17% are newcomers to Canada.

• The main reasons first-time buyers bought: wanted to buy first home and felt financially ready.
• The main reasons repeat buyers bought: had planned purchase for some time and low interest rates.
• More than 1/3 of home buyers felt concerns or uncertainty about buying a home, such as unforeseen costs, paying too much for their home, and finding the right home.
• Concern or uncertainty about buying a home has decreased steadily for four consecutive surveys and was reported by 37% of homebuyers compared to 40% in 2017, 43% in 2016 and 51% in 2015.
• Price/affordability was the most important factor considered when buying a home this year (50% for first-time buyers and 57% for repeat buyers).

• Online research is most popular but 1/4 conducted research offline only.
• Most use a computer to access online mortgage-related information.
• The top actions conducted online include using an online mortgage calculator and comparing interest rates.
• The primary website used to gather mortgage information is by far lender websites.
• About half would feel comfortable using more technology to arrange their next mortgage transaction; however, face-to-face interaction is still rated as important.
• While 8 in 10 consumers used a calculator or compared interest rates online, far fewer completed a financial self-assessment (51% for first-time buyers and 40% for repeat buyers), submitted an online pre-qualification (39% for first-time buyers and 26% for repeat buyers) or pre-approval application (34% for first-time buyers and 32% for repeat buyers).
• Despite the high comfort level with technology, when it comes to negotiating or finalizing their mortgage, more than 6 in 10 buyers believe face-to-face discussions are important.
• Real estate agents are rated as most valuable during the home buying decision process, and they are the top source of broker recommendations. Family member is the top source of lender recommendations.
• On average, first-time buyers contact 2.1 brokers and 3.1 lenders while repeat buyers contact 1.5 brokers and 2.3 lenders.

• Broker share with homebuyers decreased between March 2017 and March 2018.
• The majority of homebuyers find their broker through a recommendation.
• The main reasons for using a broker are: get the best rate/deal, advice/recommendations received and convenience/saves time.
• First-time buyers would have liked more information on mortgage/purchase fees and closing costs
• Repeat buyers would have liked more information on closing costs and types of mortgages.
• Almost 3/4 of homebuyers were satisfied with their broker.

• Lender loyalty increased significantly amongst repeat buyers and decreased slightly amongst First-time buyers between March 2017 and March 2018.
• When asked how they found their lender, almost half of homebuyers indicated that it was their primary lending institution.
• Besides a better interest rate, a top reason for staying with their lender is: convenience/saves time, while a top reason for switching is: better product terms/conditions.
• Homebuyers using a lender would have wanted more information on mortgage or house purchase fees.
• Sixty-five percent of first-time buyers and 79% of repeat buyers were satisfied with their mortgage lender.

• Only about 50% of homebuyers said their mortgage professional discussed unexpected costs.
• One quarter incurred unexpected costs, such as lawyer fees, adjustments and immediate repairs.
• First-time buyers receive more down payment advice than repeat buyers (52% versus 36%).
• Savings from outside an RRSP is the main down payment source for first-time buyers, while equity from a previous home is the main source for repeat buyers.
• 37% of first-time buyers and 28% of repeat buyers did not get an appraisal.

• 85% of first-time buyers spent the most they could afford on their home, while 68% of repeat buyers did.
• 43% of buyers paid more than what they had planned.
• 47% of mortgage consumers indicated their mortgage payment is set to an amount higher than the minimum required (36% for first-time buyers).
• Most homebuyers obtained a mortgage loan only, a fixed interest rate, a 5-year renewal term and 25-year amortization period.
• 19% of first-time buyers obtained a HELOC only or both a mortgage loan and a HELOC combined to finance their purchase (25% for repeat buyers).
• Rising interest rates and mortgage qualification was a concern of more than 1/3 of first-time buyers.
• One third of homebuyers do not have a monthly budget.
• About 40% of buyers do not have a monthly buffer in their budget. Of those that do at least 50% (64% for first-time buyers and 50% for repeat buyers) buffered $300 or less per month.
• Nearly three-quarters of first-time buyers and 61% of repeat buyers are currently renovating or plan to renovate in the next 5 years.
• 40% of first-time buyers and 29% of repeat buyers were not aware of the latest mortgage qualification rules.

• 62% of first-time buyers and 70% of repeat buyers believe the value of their house will increase in the next twelve months.
• 65% of first-time buyers and 79% of repeat buyers felt they were generally comfortable with their current level of mortgage debt.
• 60% of first-time buyers and 69% of repeat buyers indicated that, if they were to run into some financial trouble, they would have other sufficient assets (investments, other property, etc.) which could be used to supplement their needs.
• 74% of first-time buyers and 89% of repeat buyers believe that homeownership is a good long term financial investment.
• 68% of first-time buyers and 73% of repeat buyers felt emotionally attached to their home.