2019 housing outlook
Renters are most concerned about the housing market, says Zoocasa, an online real estate brokerage, in its 2019 housing outlook report released last month, which surveyed Canadians on their perceptions of the real estate market.
Answers from renters, along with short-term homeowners (less than 10 years) and long-term homeowners (over 10 years) were compared to see the level of confidence and optimism each had in the market after a topsy-turvy year of new regulations.
“This has been a year of change for Canadian real estate; new provincial policies and taxes, along with tougher federal mortgage criteria, have cramped affordability and slowed sales, meaning buyers and sellers must adapt to a chillier market reality than seen in past years,” writes Penelope Graham, managing editor of Zoocasa.
“However, 2018 also ushered in some much-needed stability, cooling some of the rampant price growth in the nation’s steepest cities and returning demand to more historical levels, especially among Vancouver real estate and Toronto homes for sale.”
Despite this, renters have an overwhelming desire to join the ranks of homeowners: 92 per cent of renters indicate they intend to eventually buy homes for sale, with 59 per cent planning to do so in the next five years. That’s perhaps because home ownerships is still seen as an essential life milestone to all segments of the population, including 63 per cent of renters, and over three-quarters of current homeowners.
Yet, renters also have the least amount of trust in real estate as an investment; just 16 per cent of renters are confident in long-term real estate market, compared to almost half of homeowners.
If that’s the case, then why are renters so eager to jump into the market? One reason could be because they are so unsatisfied with their current dwellings -- understandable when you can’t control your surroundings to the extent an owner can.
A tiny 7 per cent of renters said they are currently living their dream home, which climbs up to 43 per cent for those who have owned real estate for more than 10 years.
“This may reflect their increased ability to move up in the market due to the equity they’ve built up over time, historically low interest rates, and entering the market before home prices sharply increased over the past five years,” Graham says.
In contrast, renters, who have no equity and see interest rates rising, feel anxious and uncertain that they will ever be able to afford their dream home. Sixty-six per cent of renters feel they will never be able to afford to do so should “current market conditions” continue, compared to under half of owners. Even lower-priced market segments like condos or townhouses for sale seem out of their grasp.
One silver lining is the hope that the federal government will come to rescue and do more to help – something that 81 per cent of renters want to happen.
Until then, check out the lists on 4rent.ca to find an apartment rental that better suits your needs!
Methodology: Zoocasa findings are based on an online survey conducted by Zoocasa.com from Nov 26, 2018 to Dec 3, 2018 of over 1,140 respondents who live in Canada. Although online polls are usually not assigned a margin of error, the estimated margin of error for a sample of this size is +/- 2.9 percentage points, 19 times out of 20.