Are Canadians putting home-buying plans on hold amid interest rate hikes? A new survey suggests many
Nearly one third of younger Canadians have had to postpone or deprioritize buying a home since the beginning of the year, according to a new survey.
The survey, commissioned by Royal LePage and conducted by Leger, asked 1,565 participants if “the increased cost of living, including higher interest rates and inflation,” caused them to “postpone or deprioritize the purchase of a home since the beginning of 2022.”
Twenty nine per cent of respondents between 18-34 answered ‘yes,’ while 31 per cent responded ‘no’ and the remaining 40 per cent said they had no plans to purchase a home since 2022 began.
“I would suspect that this group may be waiting to see where pricing in tandem with interest rates settles out, then I do think you'd see those buyers potentially coming back into the market,” Karen Yolevski, Chief Operating Officer of Royal LePage Real Estate Services, told CP24. “They'll take some time now, continue adding to their down payment, continue saving funds for closing costs and things like that. What we're seeing now is driven largely because of cost of living increases and the increase in borrowing costs.”
The Bank of Canada has increased its target for the overnight lending rate from 0.25 per cent to 3.25 percent so far this year, significantly inflating the cost of borrowing.
This has in turn led to a drop in housing prices nation-wide over the past six months, with RBC previously warning of a historic housing correction.
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