Millennials Most Optimistic About Buying a Home During COVID-19
A recent Scotiabank survey revealed that only 38% of Canadians believe now is a good time to buy a new home. However, younger Canadians appear to be more optimistic about purchasing a property during the COVID-19 pandemic. Nearly 1 in 5 (18%) Canadians between the ages of 18-34 say the pandemic has accelerated their plans to purchase a home or investment property; however, one-third of them say they are waiting for prices to drop before buying a home.
According to findings from the 2020 Scotiabank Housing Poll:
- Lower interest rates are a motivating factor impacting Canadians’ existing plans to buy a property.
- More than 70% of Canadians who are renting say they have no plans of purchasing a new home in the next 1-2 years, despite low interest rates.
- 1 in 4 Canadians (25%) believe housing prices will come down in the next 12 months as a result of the COVID-19 pandemic.
- Canadians aged 18-34 (36%) are considerably more optimistic that there will be a drop in housing prices, compared to 24% of Canadians aged 35-54, and 17% of Canadians aged 55+.
And while not all Canadians are looking to purchase a new property, many are spending more time at home than ever. About 1 in 4 Canadians (26%) are now seriously considering a renovation to their current home.
“The pandemic has caused many Canadians to turn their living rooms into classrooms, their dining rooms into offices, and their basements into home gyms. This is motivating many to consider investing more in their current homes or re-evaluating their living spaces altogether,” said John Webster, Head of Real Estate Secured Lending & Scotia Mortgage Authority at Scotiabank. “Whether you’re looking to buy or embark on a home renovation, it’s a great time to take advantage of the low interest rate environment and get a better understanding of your borrowing power through solutions like our Scotia Total Equity® Plan (STEP). Seeking advice from an advisor can help uncover ways to make those dreams of homeownership or upgrades a reality, especially younger Canadians who are keen to invest in the housing market.”
Financing considerations during the pandemic
The survey revealed that for Canadian homeowners who are interested in buying a new property, 68% plan on using their savings and 42% said the equity from their primary home.
For Canadians who are planning home renovations, half do not know yet how they plan to finance the upgrades to their home. Only 12% of homeowners are planning to use equity from their home to help finance a renovation.
Scotiabank 2020 Housing Poll Highlights:
Young, Patient, and Optimistic:
- Nearly 1 in 5 Canadians between the ages of 18-34 say the pandemic has accelerated their plans to either purchase a home or investment property in order to take advantage of the lower interest rates/home prices.
- 32% of Canadians 18-34 say they are waiting to buy a property until the house prices come down.
- 36% of younger Canadians aged 18-34 feel that housing prices will come down as a result of the pandemic, versus 24% of Canadians aged 35-54, and 17% of Canadians aged 55+.
Investing in Nesting:
- Half of Canadian homeowners planning a renovation (51%) do not know yet how they plan to finance the upgrades to their home.
- Only 12% of homeowners are planning to use equity from their home to help finance a renovation, while 20% plan to use a personal line of credit, 22% plan to take money out of their investments and 3% plan to borrow from family or friends.
- The COVID-19 pandemic has negatively impacted the finances of 1 in 5 Canadians (20%), forcing them to put their plans to purchase a home on hold.
- 77% of Canadians who are renting say they have no plans of purchasing a new home in the next 1-2 years despite low interest rates.