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First-time buyers plan to look at the suburbs and smaller cities over major city centres
Most first-time buyers want to balance homeownership costs with savings goals and lifestyle needs
TORONTO, April 22, 2021 /CNW/ - After more than a year of remote working, first-time homebuyers are seeking more space with nearly 50 per cent indicating that they will be making their first housing purchase in the suburbs according to BMO's latest housing survey.
The survey, conducted by Pollara Strategic Insights, broke down where first-time buyers are looking to make their first purchase and what's driving their decision:
The suburbs: A healthy number of first-time buyers (47 per cent) plan on purchasing their first home in the suburbs. Regionally, this is highest for buyers in B.C. and Ontario (53 per cent each, respectively). The driving force for the suburbs is affordability (44 per cent), but buyers also prefer the ability to purchase a larger house (41 per cent) than might be possible in a major urban centre.
Smaller cities: Over a third (35 per cent) of first-time buyers are looking at smaller cities and towns, and house price affordability and space are the main drivers for these buyers (47 per cent each, respectively).
Major city centres: 30 per cent of first-time buyers indicated that they would be looking at a major city centre. For these first-time buyers, 27 per cent are looking at Toronto, 15 per cent at Vancouver, and 11 per cent at Montreal and Calgary. Being able to stay close to work (49 per cent) and not wanting to leave the area where they currently live (49 per cent) are the main factors pushing towards or keeping first-time buyers in those cities.
Property type: When it comes to the property type that first-time homebuyers are looking at, 61 per cent have their eyes on detached homes. Close to a third will be looking at a townhouse (32 per cent) and just over a quarter will be looking at a semi-detached house or condo (28 per cent and 27 per cent, respectively).
"With remote work expected to continue over the long-term, first-time homebuyers have the flexibility to look for a home that isn't necessarily next door to where they work," said Hassan Pirnia, Head, Personal Lending and Home Financing Products, BMO Bank of Montreal. "Between this added work flexibility and price appreciation in some major cities, the expectation is that we will continue to see a push into the suburbs. Regardless of where first-time buyers are looking, having a clear understanding of budget and affordability is important and that's why we recommend that buyers get pre-approved and speak with a mortgage specialist about their housing expectations. It will provide them with greater transparency at the start of their housing journey."
The survey also revealed that first-time buyers are looking to maintain savings and lifestyle goals after purchasing a home:
The vast majority (92 per cent) indicated that, when buying their first home, they still want to have money left over to enjoy the things they love – traveling and shopping. First-time buyers are also looking at maintaining their savings goals, with 90 per cent wanting to balance monthly housing costs with the ability to save regularly.
On the other side, there are first-time buyers that are willing to stretch their wallets to purchase their first home. 61 per cent indicated that purchasing a home they wanted was more important than having money left over each month. First-time buyers in the Prairies and Quebec were the most likely to share this sentiment (67 per cent and 66 per cent, respectively).
"We recognize that it's important for first-time buyers to balance homeownership with other parts of their life, and we're trying to make an impact," added Mr. Pirnia. "We typically advise prospective buyers not to spend more than 30 per cent of their monthly income on housing and are continuing to look for ways to help with affordability, especially for first-time buyers, like providing them with the ability to get cashback on their mortgage."
For more information on mortgage options and affordability tools, to be pre-approved online, or to find out how to get up to $3,500 cash back on a mortgage, visit: https://www.bmo.com/main/personal/mortgages/special-offers/.
The BMO Home Buyers Survey was conducted by Pollara Strategic Insights via an online survey between March 1st and March 9th,2021, with an online sample of 1,000 adult Canadians planning on buying a home in the next 12 months. Of these, 800 were looking to buy their first home. The margin of error for a probability sample size of 1,000 is ± 3.1% 19 times out of 20.
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $973 billion as of January 31, 2021, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.
Internet: www.bmo.com Twitter: @BMOMedia
SOURCE BMO Financial Group
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