While housing prices are falling across the country, they’re still at unaffordable levels for many. According to the Ontario Real Estate Association (OREA), the residential average price of a home in Ontario in June was $881,475, up by 2.8% from the same month last year. These high prices are spurring many to make more affordable housing moves.
According to a LowestRates.ca email survey*, 20% of Ontario homeowners moved within the past two years in order to afford a home, while 32% plan to do so in the next year.
If mortgage rates continue their steep incline, this percentage may increase. The Bank of Canada’s recent series of interest rate hikes continue to put financial strain on homeowners and make mortgages an unrealistic feat for many buyers. As rates rise in a bid to meet the Bank’s inflation target, many homeowners may find they’re struggling to keep up with mortgage payments.
32% of Ontarians plan to move in the next year so they can afford a home
More Ontarians who plan to move are now prioritizing home affordability compared to those who moved within the last two years.
According to the survey, in the next year:
32% plan to move to afford a home
22% plan to move for lifestyle reasons
17% plan to move so they can purchase a larger home
8% plan to move to downsize
3% plan to move for employment opportunities
The percentage of Ontarians who plan to move in the next year to purchase a larger home (17%) is significantly lower than those who moved within the last two years (30%). Meanwhile, the percentage of Ontarians looking for a home they can afford (32%) is much higher than it was for those who have already moved (20%).
“With many workers back in the office, people are thinking more rationally about their needs,” says Zlatkin. “Excess space might not be as high of a priority, particularly if they are more comfortable with downsizing to a home that can accommodate a moderate lifestyle without breaking the bank.”
30% of Ontarians moved in the last two years to purchase a larger home, but most didn’t leave the province
According to the survey, the most common reason Ontarians moved in the last two years was to find a larger home.
The survey results revealed:
30% moved to purchase a larger home
20% moved to afford a home
15% moved for lifestyle reasons
10% moved to downsize
4% moved for employment opportunities
Space became more valuable than ever during the COVID-19 lockdowns, causing many Canadians to move out of cities to smaller towns or rural areas.
While most Ontarians who moved within the last two years stayed in the same city or town (61%), a substantial number also relocated to different cities or towns in the same province (36%). However, only a small portion (4%) of those who moved within the past two years were willing to move to a different province — possibly out of concern of limiting their employment opportunities.
“Those who have moved to smaller cities and work in downtown Toronto are more likely to spend a premium on a property close to accessible transportation,” says Leah Zlatkin, mortgage broker and expert at LowestRates.ca.
“Unless you have a job that is entirely remote, most Canadians don’t want to be on the outskirts until they are closer to retirement.”
Ontario prices remain high, but are decreasing quickly
Despite the pressure put on mortgage holders, Ontarians still aren’t planning on moving too far from home to find an affordable property. In fact, many may not need to. According to the Canadian Real Estate Association, Ontario has seen the largest drop in average home prices since February 2022. However, certain cities in different provinces, like Quebec City and Winnipeg, remain significantly more affordable overall.
Regardless, the survey reveals that almost half of Ontarians (46%) plan to stay in the same town when they move, while 32% plan to move to a different city or town in the same province, and 7% plan to head to a different province.
Whether you’ve already moved to afford a home, or plan to, finding a manageable mortgage rate should be top of mind if you’re a homeowner. Shopping the market for Ontario’s lowest mortgage rates will ensure you have access to the most affordable rate available to you. This is especially important in today’s rising-rate environment.
But, says Zlatkin, “The rate hikes are manageable as long as budgets are accounted for.”
*Survey conducted by LowestRates.ca, polling 452 Ontario homeowners between June 17 and 24 who used LowestRates.ca’s mortgage quoter.
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