According to a recent survey, over 25% of Canadian renters are planning to purchase a home within the next two years. The survey conducted by Royal LePage revealed that 27% of renters have intentions to buy a home in the near future, with this number increasing to 40% for individuals aged 18 to 34.
However, the survey also found that 69% of renters do not have plans for homeownership in the immediate future. The main reason cited was the lack of sufficient income to afford a home in their desired location.
President and CEO of Royal LePage, Phil Soper, highlighted the challenges faced by renters due to high mortgage rates and the housing shortage in Canada.
Half of the renters planning to buy a home mentioned that they would have a down payment of less than 20%, while 26% indicated they could put down 20% towards a home purchase. Additionally, 15% stated they would have more than 20% for a down payment.
The survey also revealed that a majority of potential homebuyers are relying on savings (53%) or registered First Home Savings Accounts (46%) for their purchase. Some respondents mentioned using RRSP savings through the Home Buyers’ Plan (29%) or funds received from family or inheritance (25%).
Renters’ Consideration for Home Purchase
For renters looking to buy a home, the survey showed that some may need to consider locations outside their current city due to affordability constraints. While 44% believe they can afford a home in the same area they rent, 37% think it’s not feasible. Among those who believe they can’t afford a home in their current city, 40% mentioned they might have to commute over 50 kilometers to find a suitable home.
In terms of future trends, Mr. Soper predicted a migration from expensive regions to more affordable markets across the country, driven by the desire for homeownership.
Some respondents are waiting for interest rates and property prices to decrease before making a purchase (33%), while others are saving up for a down payment (22%) or facing challenges in qualifying for a mortgage (20%). The survey noted that falling borrowing costs could help renters transition to homeownership but may also increase market competition.
Price of Renting
The survey also highlighted the financial burden faced by renters, with 37% spending between 31-50% of their income on rent. In cities like Vancouver and Toronto, 27% and 19% of renters, respectively, reported spending more than half of their income on housing.
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