Yahoo Finance Posthaste: Canadians willing to sacrifice financial security for homeownership
High mortgage rates and rising inflation haven’t discouraged Canadians from their homeownership dreams, according to a new report by real estate marketplace Zolo.
The study, which interviewed 800 homeowners who bought homes in the past four years, found that Canadians are willing to sacrifice their financial security for a place to call their own. In fact, 93 per cent said competitive property markets and rising interest rates actually influenced their decisions to buy, and another 43 per cent said they wanted to purchase a property before prices increased further.
That doesn’t mean their finances aren’t affected by current economic conditions: 92 per cent indicated that inflation at least somewhat hurts their ability to afford their home. For 30 per cent of respondents, finances are so tight that they have little room for extras, while 10 per cent are unable to meet basic needs.
What’s interesting is that despite this, 45 per cent said they would still be content with their properties if there was another interest rate increase before the end of 2023.
But economic challenges aren’t the only things eating into homeowners’ budgets.
A separate report by home improvement company HomeStars, which interviewed 1,105 homeowners who completed a renovation or repair in the past year, found that a third did weather-related emergency repairs, spending an average of $12,300 in the past 12 months. That number peaks at 41 per cent in Atlantic Canada, where excessive rain caused catastrophic flooding on the East Coast in July.
A majority (79 per cent) of Canadians said they had cash on hand to pay for renovations. Their outlook continues to remain optimistic for the year ahead.
Nearly three-quarters of homeowners are planning to do at least one renovation in the next 12 months. Anticipated spending is expected to come down to $10,264 on average, but only a third are planning on postponing planned renovations due to increasing interest rates.
“We are seeing quite a few new and emerging trends in 2023 — from weather-related emergency repairs to the future of multi-generational living,” Shir Magen, chief executive of HomeStars, said in a press release. “While overall spending is down from last year, due to inflation and rising interest rates, the majority of homeowners surveyed are still planning to renovate.”
The report also found that more Canadians are buying newer or previously renovated homes this year, with only 28 per cent buying a fixer-upper compared to 44 per cent in 2022.
Looking ahead, a quarter of them are expecting to live in a multigenerational household in the next 10 years.
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Statistics Canada says the number of job vacancies in July fell 5.8 per cent to their lowest level since May 2021. Vacancies declined by 43,100 to 701,300 in the month, continuing a steady downward trend since June of last year. On a year-over-year basis, the number of job vacancies was down by 28.1 per cent or 273,700. — The Canadian Press
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Today’s Posthaste was written by Noella Ovid, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
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