Housing Hold'em: RBC Poll finds over half of younger Canadians
plan to buy next year
46 per cent of younger homeowners say mortgage costs eat
up too much income
TORONTO, APRIL 7, 2011— Over half of young
Canadians (55 per cent) believe that it makes sense to delay
a home purchase until next year, 10 points higher than the
national average, and almost half (46 per cent) of younger
homeowners admit that their mortgage is using up too much
of their income, according to the 18th
Annual RBC Homeownership Study.
"In a more balanced housing market, it makes sense that
younger and first time homebuyers are waiting to assess all
of their options and do their research before buying a home,"
said Bernice Dunsby, director of Client Acquisition, Home
Equity, RBC. "It's also important to get expert advice
on what you can afford and leave yourself with a little extra
wiggle room in your budget so you don't become house poor,
as home maintenance and lifestyle costs can add up."
The poll found that younger Canadians are more likely to
purchase a home than other age groups, as 43 per cent (aged
18-34) are looking to buy in the next two years, compared
to the national average of 29 per cent. Older Canadians are
much less likely to buy in the next two years, including those
aged 35-54 (29 per cent) and over-55 (17 per cent).
When looking for advice on purchasing a home, younger homebuyers
(aged 18-34) are more likely to use real estate websites (55
per cent) or family (48 per cent) and friends (35 per cent).
The majority of older Canadians, aged 45-54 and over-55, are
more likely to rely on a real estate agent as their choice
for advice, at 71 per cent and 74 per cent respectively.
"Being prepared and working with a mortgage specialist
will help you buy with confidence and give you expert advice
on current financing options," added Dunsby. "Having
a mortgage pre-approval is a critical component of buying
a home, particularly for younger homebuyers. It presents you
as a serious purchaser to both realtors and sellers."
According to the poll, younger Canadians (aged 18-34) are
most concerned about having a good down
payment (23 per cent) and rising real estate prices (23
per cent) when looking to buy a home. Canadians aged 35-54
are most concerned with rising prices, as 24 per cent are
worried about mortgage
rates and 25 per cent about home prices increasing. Canadians
over the age of 55 list increasing home prices
(36 per cent) as their biggest worry when deciding to purchase
While 43 per cent of younger Canadians (aged 18-34) are paying
off their mortgage
faster than they expected, two-thirds (66 per cent) say it
is larger than they would like it to be.
Dunsby outlines five tips for younger Canadians looking to
buy a home:
Leave some wiggle room: Line up your paycheque and
compare it to your total costs. Make sure that you have enough
left over for new furniture, repairs and costs of living.
Do a spending
analysis to see what the total costs of homeownership
would be relative to your lifestyle and build that into your
plan (i.e. if you enjoy eating out or going to the gym).
The power of the pre-approval and stress test: Make
sure you have your financing in order before you start your
search - it will show sellers and real estate agents that
you're serious. Mortgage
pre-approvals have no obligation and help lock in your
interest rate. Work with a professional mortgage
specialist to test your mortgage for potential mortgage
rate and cost increases to make sure you can handle it.
Don't overbuy: Be realistic in choosing a home that's
within your means and make concessions on what you're looking
for. Set aside a budget for ongoing home maintenance and potential
cost increases (for utilities, taxes and fees). Online
tools and calculators can help you plan your budget.
Look at payment
flexibility: Look at a mortgage that provides you
with the option of doubling up your mortgage payment or putting
down a lump sum payment once a year. Doubling up your mortgage
payment just once per year can save you tens of thousands
in interest costs and take years off your mortgage amortization
Don't forget closing costs: Closing
costs are typically one to two per cent of your final
purchase price. Build this into your budget along with the
cost of new appliances, utility and cable hookup and moving
What types of homes are Canadians looking to buy? (according
to the 18th
Annual RBC Homeownership Poll):
Younger Canadians (ages 18-34)
- Detached house 59 per cent
- Condo/loft 15 per cent
- Semi detached house 10 per cent
- Townhouse 10 per cent
Mid-range Canadians (ages 35-54)
- Detached house 71 per cent
- Condo/loft 10 per cent
- Semi detached house eight per cent
- Townhouse seven per cent
Older Canadians (55 and older)
- Detached house 68 per cent
- Condo/loft 15 per cent
- Semi detached house five per cent
- Townhouse five per cent
More First Time Homebuyers choose RBC Royal Bank than any
other bank. Canadians can visit the RBC
Advice Centre for advice on the costs associated with
purchasing a home. The RBC Advice Centre is an online resource
that gives Canadians access to advice about all aspects of
their finances including their homeownership goals - whether
they are buying their first home, planning their next move,
renovating or managing their current home financing.
RBC is the largest residential mortgage lender in Canada.
As the country's number one source of financial advice on
homeownership, RBC conducts consumer surveys as one way to
provide insight to Canadians about the marketplace in which
they live. These are some of the findings of the RBC's
18th Annual Homeownership poll conducted by Ipsos Reid
between January 12 to17, 2011. The annual online survey tracks
Canadians attitudes and behaviours around homebuying and homeownership.
The results are based on a sample where quota sampling and
weighting are employed to balance demographics and ensure
that the sample's composition reflects that of the actual
Canadian population according to Census data. Quota samples
with weighting from the Ipsos online panel provide results
that are intended to approximate a probability sample. An
unweighted probability sample of 2,103 adult Canadians, with
100 per cent response rate would have an estimated margin
of error of ±2 percentage points, 19 times out of 20.
The margin of error will be larger within regions and for
other sub-groupings of the survey population.
- 30 -
RBC Communications, (416) 974-2124
RBC Media Relations, (416) 974-8810