Affordability was the Key for Homebuyers in 2019

Ottawa, November 15, 2019

Price and affordability were the top factors for four out of five buyers during their 2019 home purchase, according to the annual Mortgage Consumer Survey (MCS), released today by Canada Mortgage and Housing Corporation (CMHC). The number of buyers spending the maximum amount they could afford on their home fell to 60% in 2019, a significant drop from 78% in 2018.

The number of first-time homebuyers who had rented housing with family and friends before making their home purchase increased from 28% in 2018 to 44% in 2019.

The findings of the 2019 Mortgage Consumer Survey offer key insights into the current state of home buying, homeownership and mortgage lending in Canada.

“The mortgage consumer survey’s goal is to help put Canadians and the mortgage professionals who serve them in the best position to succeed when shopping for a mortgage,” said Sam Carnavole, CMHC`s Director of Client Relationship Management. “This year’s survey includes important takeaways on affordability and the first-time buyer’s journey from renting a home to owning one. We hope the survey helps Canadians get the most of what can be an overwhelming process.”

View the complete Mortgage Consumer Survey results on our website.

Highlights from the survey relating to affordability:

Top homebuyers “must haves” were either price or affordability (80%), number of rooms (73%) or proximity to public transit (67%).
In 2019, 60% of homebuyers bought the highest-priced home they could afford, falling significantly from the 78% who spent their maximum in 2018.
In total, around 23% of homebuyers in 2019 said their current level of debt is higher than they were expecting. This number is up from 19% of buyers in 2018.
The majority of buyers (59%) reduced their non-essential expenditures since owning a home. The most common area where they chose to cut back was on entertainment (66%), vacations (55%) and food (44%). About one quarter of the homebuyers surveyed (26%) applied for a tax credit or rebate with their purchase.
Most buyers (65%) believe the new mortgage qualification “stress test’’ will prevent more Canadians from taking on a mortgage they can’t afford.
Of the buyers surveyed, 87% were confident in the long-term financial prospects of homeownership, and their future ability to make their mortgage payments.

Renting to homeownership:

The percentage of first-time buyers who had rented with family and friends before buying a home increased from 28% in 2018 to 44% in 2019.
The percentage of first-time buyers who were renting on their own before buying a home decreased from 39% in 2018 to 23% in 2019.
The percentage of first-time buyers who were renting for 10+ years before buying a home increased from 22% in 2018 to 31% in 2019.

In 2019, CMHC completed an online survey of 1,385 recent mortgage consumers who were all prime household decision makers and had undertaken a mortgage transaction in the past 12 months. The online interviews were conducted in all regions of the country in both English and French. 47% of those surveyed were first time homebuyers, while 53% were repeat buyers.

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 all levels of governments, consumers and the housing industry.

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