TORONTO, March 21, 2024 /CNW/ - In today's market, every real estate move is a calculated balance of choices and trade-offs unique to every homebuyer. To understand how first-time homebuyers in Canada are making those decisions, Houseful, an RBC company, released its First-Time Homebuyer Trade-Off Survey.
The findings reveal that first-time homebuyers in Canada under 30 years of age are successfully buying their first home sooner than they expected by adapting to larger trade-offs that would have traditionally been considered 'deal-breakers'. Houseful is on a mission to power confident decisions throughout the home owning journey, and these insights can provide a more viable blueprint for other first-time homebuyers in a difficult market.
Younger first-time homebuyers are making larger trade-offs and buying earlier than expected
Younger first-time homebuyers in Canada are navigating the housing market with a pragmatic approach – by being more open with their preferences. As a result, they're purchasing their first home sooner than they expected. According to survey results, first-time homebuyers recently or currently in-market under 30 are buying or planning to buy earlier than expected (38.0 per cent) more often than those over 30 (18.4 per cent).
Younger first-time homebuyers' quicker timeline to buy is driven by the flexibility of their lifestyles compared to older first-time homebuyers, which factors into their willingness to make bigger trade-offs. Some of the trade-offs that younger first-time homebuyers have been willing to make include:
- Smaller and smaller spaces - First-time homebuyers under 30 are willing to embrace smaller living spaces (65.2 per cent) compared to those over 30 (47.2 per cent).
- For now, not forever - Instead of seeking a forever home, younger first-time homebuyers recently in-market are prioritizing finding a home that's right for them at their current life stage. Just over half (53.3 per cent) of those under 30 said they have bought their dream home, versus those over 30 (72.6 per cent).
- Expanding location preferences - For younger first-time homebuyers, location also holds slightly less significance. Only 28.3 per cent of those under 30 prioritize it, compared to 34.9 per cent of those over 30. Most younger first-time homebuyers are also open to living more than 25 kilometres away from a large city (56.2 per cent).
"Home ownership is the beginning of generational wealth creation," says Karen Starns, CEO of Houseful. "Many younger first-time homebuyers recognize that home ownership is a life-long pursuit, and an early start to the journey can deliver exponential long-term value to support future goals."
More purchasing power, less compromises
While younger first-time homebuyers in Canada are buying earlier than expected, another demographic is pursuing a different path to successful home ownership.
Recent first-time homebuyers or those currently in-market surveyed with a household income between $100,000 and $150,000 are willing to wait a little longer for the home that checks all their boxes. Key findings include:
- The waiting game - Nearly 49.0 per cent of those surveyed in this income bracket have purchased or plan to purchase later than expected to find their perfect home, compared to 14.6 per cent for those with an income over $150,000.
- Less compromises - Living space is important to those within the $100,000 to $150,000 income bracket, with slightly less than half (46.5 per cent) willing to compromise compared to those making over $150,000 (61.4 per cent) and under $100,000 (52.2 per cent). They were also the most selective on location — only 12.8 per cent were willing to move more than 50 kilometres away from their desired city, compared to 34.0 per cent with incomes over $150,000 and 27.3 per cent with incomes under $100,000.
- Pursuit of happiness - However, first-time homebuyers recently in-market surveyed in the $100,000 to $150,000 income bracket report the highest levels of satisfaction with their home purchases (85.0 per cent) compared to those with income above (60.9 per cent) and below (78.2 per cent) this bracket range.
The Houseful survey findings show that first-time homebuyers in Canada have a multitude of considerations and pathways to home ownership. Houseful is committed to helping more people realize the benefits of home ownership, no matter who they are or where they are in their journey.
"As homebuyers make one of the most important decisions of their lives, they need the right support to navigate an overwhelming market with confidence," says Starns. "By equipping first-time homebuyers with an expert toolkit, we can help them take the first step into home ownership."
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. The information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
About RBC
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About Houseful
Houseful, an RBC company, is a comprehensive home ownership platform that brings real estate and finance together by expertly connecting the dots for consumers so they don't have to go it alone. From planning and searching to buying and thriving, Houseful makes it so anyone can confidently navigate trade-offs and decisions through a lifetime of home owning. Learn more at Houseful.ca.
SOURCE RBC
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