More than half of Ontarians can’t afford a home in current city, poll finds

More than half of Ontarians surveyed in a recent poll believe they may never afford a home in their current city or town.

Right at Home Realty, Canada’s largest independent real estate brokerage, shared its results from a data survey conducted between May 10 and May 12 that polled 813 adults in the province.

Among the highlights, data found that 57 per cent of these respondents believed they won’t ever afford a home, while more than half (54 per cent) of parents in Ontario do not plan on helping their children buy a home soon.

Additional data revealed that 80 per cent of current Ontario homeowners are not planning to sell their homes in the next two-to-three years, compared to 77 per cent in 2021.

“The impact of rising mortgage rates has reduced the buying power of potential homebuyers,” said John Lusink, president of Right at Home Realty. “Additionally, the minimum mortgage stress test rate will climb to seven per cent or higher.”

Other key findings, according to the survey.

• Only 19 per cent of potential first-time homebuyers in Ontario plan to buy in the next two to three years, compared to 30 per cent in 2021.
• Twenty three per cent of Ontario homeowners who plan on selling their homes are doing so to take advantage of the current market, compared to 11 per cent in 2021.
• Thirty two per cent of Ontarians say the COVID-19 pandemic has negatively impacted their ability to save for a home, compared to roughly one-quarter (23 per cent) in 2021.

“Another impact of the rising rates is the financial disincentive created for those thinking of selling but are now faced with much higher financing costs when considering buying their next home,” Lusink added.

“While we will continue to see a drop in market activity, we do not anticipate this will lead to a market crash.”

Younger buyers in tough due to rising mortgage rates

The Maru Public Opinion survey examined the stress younger aspiring home buyers face in the current landscape, determining that mortgage rate increases specifically impacts these age groups.

Nearly two-thirds (61 per cent) of all respondents said a mortgage rate increase of 150 basis points (1.5 per cent) or less would have no impact on the decision to purchase a home, compared to 70 per cent in 2021.

The survey results arrive as annual inflation rates skyrocketed to their highest level in nearly 40 years in May, fuelled by soaring gas prices.

Statistics Canada said Wednesday that its consumer price index in May rose 7.7 per cent compared with a year ago, its most significant increase since January 1983 when it gained 8.2 per cent and up from a 6.8 per cent increase in April this year.

The gain came as energy prices rose 34.8 per cent compared with a year ago, with gasoline prices up 48 per cent.

Affordable housing an issue for eager home buyers

The survey found that housing affordability continues to be a significant concern for first-time homebuyers.

The data revealed that 61 per cent of GTA residents and 74 per cent of those in (416) regions believe they may never be able to afford a home in their current city or town.

More than half (54 per cent) of Ontarians said the economic uncertainty impacts their decision to buy a home. Nearly half (45 per cent) said housing affordability challenges had led them to consider moving or buying a home elsewhere.

Rising housing costs was a key issue for all provincial political parties during the last federal election, and prices have continued to grow in the months since.

“The cost of house prices is an issue, especially amongst my millennial clients,” said Milli Pajpani, sales representative at Right at Home Realty.

“Most millennials want a property — either to reside in or invest in — however, many do not have the savings to make those purchases happen because of the current prices.”

With files from The Canadian Press