Sagen MI Canada's First-time
Homebuyers Study Highlights:
- First-Time Homebuyers (43%) and future home buying intenders
(36%) are far more optimistic than the general population
respondents (13%) in Canada in
thinking that this is good time to buy a home given the state of
their local real estate market.
- Half of recent first-time buyers say that while challenging,
recent economic conditions including inflation and rising interest
rates would not have changed their decision to buy their home, and
a further quarter say these conditions have had no impact on their
ability to afford their home.
- Key factors such as price and value rank most important to
buyers, first-time buyers (FTB) and first-time intenders (FTI)
place greater importance on their home's proximity to where they
work (79%, 77% respectively) but also having space to work from
home (76%, 76%).
TORONTO, May 17, 2023
/CNW/ - A survey1 released by Sagen™,
the country's largest private residential mortgage insurer,
analyzed key trends among first-time homebuyers who purchased a
home within the last two years, and first-time intenders, who plan
to buy within the next two years.
Lack of housing availability remains a key challenge as
four-in-ten general population respondents say there is
insufficient supply of homes available, down from 55% in 2022, but
well ahead of the 26% who feel there is a normal supply or 15% who
say there is ample supply. In contrast, half of general population
respondents say it is a bad time to buy a home, with only 13
percent saying it is a good time to buy. Yet home buyer confidence
is far greater among both recent buyers (43%) and future intenders
(36%) who are more likely to say it is a good time to buy a
home.
Moreover, economic conditions such as rising interest rates and
inflation have had a modest impact on the decisions of recent
first-time homebuyers– 26 percent say conditions have had no impact
on their ability to afford their homes, while half (52%) say that
while they have been challenging, they would not have changed their
decision to buy a home. Among future intenders, current conditions
have led 43 percent to delay the timing of when they buy their
homes, while 35 percent conditions have not impacted when they will
buy their homes.
Recent economic conditions have also led many recent buyers and
intenders to either purchase or plan to purchase a smaller home
than they expected (32% (FTB), 37% (FTI)) or to purchase a home in
a more affordable neighbourhood than expected (34% (FTB), 31%
(FTI)).
Encouragingly, despite economic challenges, the study shows that
in 2023, fewer recent buyers than in 2021 report having to delay or
suspend their mortgage payments (17%, down from 23%), and they are
just as likely to be making double-up or increased
bi-weekly/monthly mortgage payments as before (32%, little changed
from 33%).
"These results show Canadian first-time buyers have been, and
are entering the market eyes wide open, mindful of what they can
afford, the trade-offs they need to make, and their own desire to
achieve the dream of home ownership" says Stuart Levings, President and CEO of Sagen.
"Rising interest rates have cooled home prices in many regions of
the country, leaving potential sellers waiting on the sidelines for
conditions to return to normal. This has made it more difficult in
the short-run for prospective buyers to find the homes they want,
but longer term they remain confident in their decisions to become
homeowners."
The impact of the hybrid work environment is also reflected in
the survey results as well – first time homebuyers and intenders
both place greater importance on the proximity of their homes to
where they work than they did in 2021, during the depths of
COVID-19. In addition, they are placing much greater
importance on having space where they or their partners could work
from home – 76%, up from 64% among recent buyers, and 76%, up from
70% among future intenders. At the same time, more now rate the
importance of the energy efficiency of their homes higher – 75% of
recent buyers and 84% of intenders rate this important.
In search of more affordable homes, a quarter of both first-time
homebuyers and intenders are choosing condominiums (24% each),
steadily increasing since before COVID-19, while the proportion
seeking fully detached homes has been decreasing (46%, 47%
respectively).
"First-time homebuyers are expecting that the hybrid work model
is here to stay" says Mr. Levings. "They are compromising on space
so they can find an affordable home that is closer to work for when
they need to be in-person, yet they also want room to work from
home when they are able to."
The findings suggest that property developers, notably condo
builders, will need to take these new considerations into mind as
they design homes that will adapt to current and future needs.
Support from family to help first-time buyers has become
increasingly important – more than a third (35%) of first-time
homebuyers received financial help with their down payments from
their families, while a quarter are receiving help with monthly
mortgage payments from their families. If these buyers had not
received financial assistance, most recent buyers would have either
delayed purchasing until they had saved a larger down payment (44%)
or would have been able to buy their current home with a smaller
down payment (42%).
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1 The survey was conducted between
February 22, 2023 to March 27, 2023 by Environics Research. See
'About the Survey' at the end of the release for survey
methodology.
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About the Survey
The study was completed by Environics Research on behalf of
Sagen.
A total of 2,223 interviews were conducted with Canadians aged
25-45 who had purchased their first home within the prior two
years, or who plan to purchase their first home within the next two
years. Online interviewing was completed between February 22 and March 27, 2023. Quotas
were set to oversample in urban regions with weighting to bring
them into overall national proportions.
About Sagen MI Canada
Inc.
Sagen MI Canada Inc., operating through its wholly owned
subsidiary, Sagen Mortgage Insurance Company Canada (doing business
as SagenTM, 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,
2023, the Company had $6.7 billion
total assets and $2.8 billion
shareholders' equity. Find out more at www.sagen.ca.
For further information, please contact:
Susan Carter
Vice President, Marketing and Communications
SagenTM
905-287-5520
David MacDonald, Group Vice
President, Financial Services
Environics Research
416-278-3067
SOURCE Sagen MI Canada Inc.