October saw a resurgence of COVID-19 cases across the country and a corresponding return to tighter health-related restrictions and closures. Still, home resales jumped to another record-setting, monthly high with a nearly one-third increase (32.1%) over a year ago. Although there was a slight (-0.7%) slip from September.
The national average price for a home topped $607,000, up 15.2% over last October. With Toronto and Vancouver calculated out, the national average price rose to $480,000, a 19.5% increase year over year.
At the same time, the annual Debt Survey by one of Canada’s big insurance companies / banks suggests one-third of Canadians (35%) were financially unprepared for the pandemic. That appears to have led to a substantial amount of anxiety about homeownership.
The survey indicates more than a third of respondents (36%) have “significant” worries about saving for a home. It suggests many feel they have been – or are about to be – priced out of the market. It says, on average, Canadians have been allocating nearly half of their income to essentials like food and housing since the pandemic started. Fifty-eight percent of homeowners and 54% of renters worry about making their payments.
There is a sharp disparity that shows up in the survey as well. More Canadians report being debt free – 27% compared to 21% last fall. Over the same period, the average savings rate has climbed to 16% of after tax income, up from 14%. But nearly a quarter of respondents report saving zero after tax income since the pandemic started. And, those who are in debt appear to be having a harder time. Nearly a quarter say everyday living has caused their debt.
According to the survey nearly half of indebted Canadians say their debt is having a negative effect on their mental health. More than a third say their debt keeps them awake at night.