Fear of missing out on buying a home due to insufficient down payment growing among Canada's first-time buyers

• By Sue Aitken
• Posted Monday, Jun 26, 2023 11:02 am

Fear of missing out on buying a home due to insufficient down payment growing among Canada's first-time buyers

As home prices and interest rates continue to rise, whilst inventory remains extremely tight, Canada’s first-time buyers are feeling increasingly worried about missing out on their desired home because they don’t have enough of a down payment.

According to a recent survey released by Sagen™, conducted by Environics Research with a series of questions for Royal LePage, 67% of first-time buyers (those that purchased a home within the last two years) said that before buying, they worried they might miss out on the property they really wanted because of an insufficient down payment. This reflects a five point increase compared to the same survey question in 2021 (62%), and a ten point increase over the 2019 result (57%).

When the same question was asked to first-time intenders – those who plan to buy their first home in the next two years – 63% reported feeling worried that they will miss out due to an insufficient down payment, a three point increase from the same survey question in 2021 (60%).

“Canadians continue to face challenges in entering the real estate market, be it high interest rates, strict mortgage qualification standards, or difficulty saving enough money in a reasonable time period for a down payment,” said Phil Soper, president and CEO, Royal LePage. “That first transaction is the most difficult, and in today’s environment, first-time buyers are faced with large price tags, high carrying costs and the added challenge of qualifying for lending at higher rates due to the stress test.

“Still, they continue to prioritize home ownership, and view it as a milestone worth achieving. With household savings still sitting above historical norms, due to accumulation during pandemic lockdowns, many Canadians will have a leg-up on their down payment when they are ready to enter the market,” added Soper....[READ MORE]