TORONTO, May 14, 2021 – A survey released by Sagen and Royal LePage analyzed key trends among first-time homebuyers who purchased a home within the last two years. Sixty-two per cent of respondents nationwide said that before buying their first home, they worried they might miss out on a property they wanted because of an insufficient down payment.
“Buying a home, especially your first home, is one of the biggest and most important financial investments a person will ever make. While the market is highly competitive for buyers, a real estate agent can help find similar properties in comparable, but more affordable neighbourhoods. Being properly informed and prepared can make the homebuying process easier and more enjoyable.”
“It’s not at all surprising that first-time homebuyers are experiencing anxiety about the size of their down payment.”
Phil Soper, president and CEO, Royal LePage
While supply has shown signs of improving during the spring market, Soper added that inventory remains low for current buyers, adding more stress to an already challenging process.
Survey Highlights:
- 75% of first-time homebuyers in Toronto and 69% in Vancouver reported feeling worried that they would not have a large enough down payment to purchase a home (68% and 58% in 2019, respectively)
- In Montreal, 63% of survey respondents felt worried about the size of their down payment before purchasing their first home, in line with the national average of 62%
- First-time homebuyers in all regions, with the exception of Alberta and the Prairies, reported higher rates of anxiety compared to the same survey in 2019
- Nationally, of those who lived with their parents before purchasing their first home, 15% said they delayed their parents’ plans to downsize as a result
Well above the national average, respondents in Canada’s largest urban centres were increasingly worried that they would not be able to afford a down payment, compared to respondents in 2019. Seventy-five per cent of first-time buyers in Toronto reported feeling worried that they would miss out on buying a home because of an insufficient down payment (68% in 2019). Following Toronto, for the same question, Vancouver reported 69 per cent (58% in 2019) and Montreal reported 63 per cent (60% in 2019).
“Although COVID-19 has impacted first-time buyers across the country, many have been able to save and buy their home sooner than expected,” said Stuart Levings, president and CEO of Sagen. “The hurdle causing anxiety for first-time homebuyers is saving for a down payment in an environment of rising home prices in many parts of the country. While some have parents who can step in, many do not and they are struggling to get into the market.”
When asked to describe their housing situation before purchasing their first home, 25 per cent of respondents nationwide said they lived with parents or relatives. Fifty per cent of those living with family paid rent to their families (43% in 2019), and of those paying rent, 34 per cent said they paid less than the market value (30% in 2019).
Fifteen per cent of respondents who lived at home said that doing so delayed their parents’ own decision to downsize, while a further 15 per cent said their siblings would have to leave the nest before their parents could move. Sixty-three per cent said their parents had no plans of downsizing when they become empty nesters.
