First-time homebuyers in Canada are anxious and it’s not just prices that are the cause.
Despite boasting home prices that are about one-third of Vancouver’s, Montreal is a more anxious city when it comes to real estate, especially for first-time homebuyers, according to a survey released Thursday by Genworth Canada and Royal LePage.
Sixty percent of respondents in Montreal reported being worried about missing out on a home purchase because of an insufficient down payment, compared to 58% of respondents in Vancouver.
Still, neither city was as anxious as Toronto, where 68% of respondents said they felt anxious about saving a down payment that was large enough for a home purchase.
What factors drove this anxiety? In Toronto, the answer might lie in location. Fifty-nine percent of respondents in the city said that they prioritized living in an area close to where they work over living in a large home — the highest regional percentage in the country. This is likely due to long commute times for residents, who reported spending about 34 minutes traveling one way to and from work, but it also means that buyers are battling to stay close to the city center.
In Vancouver, the anxiety clearly stems from high home prices: even as prices fell both year over year and month over month this spring, the average price of a home in the city still clocked in at $1.01 million in March.
So what’s going on in Montreal? The city is nowhere near as congested as Toronto — and definitely not as expensive as Vancouver.
The answer lies in how quickly the city’s real estate market is growing: in February, the Canadian Real Estate Association reported that the city was set to overtake Vancouver as the second largest market in the country (Toronto ranked in first place).
“Montrealers have been watching home values escalate over the past three years,” said Royal LePage president and chief executive officer Phil Soper.
“Many are wondering if they have time to grow their down payment or if they should get in the market now as prices continue to rise.”
“While those who live in other parts of the province have the convenience of time and can shop around, we are seeing that first-time home buyers in Montreal are feeling the pressure to make quick decisions to enter the market,” added Dominic St-Pierre, vice president and general manager of Royal LePage for the Quebec region.
“Low inventory and high demand have encouraged an increase of multiple offers in the city in favour of more experienced buyers. First-time home buyers have to be prepared and secure financing prior to making an offer, with a sufficient down payment and mortgage pre-approval if they are serious about a purchase.”