Ontarians who belong to the millennial generation worry that real estate prices will keep rising forever. Their parents and grandparents, meanwhile, are almost as fearful that they won't.
That generational divide was highlighted in the results of a survey commissioned by the Real Estate Council of Ontario.
It found that 84 per cent of young people are anxious about whether they'll ever be able to afford a home that they like, while nearly 70 per cent of baby boomers and seniors are most concerned about getting the maximum value out of their homes – suggesting they imagine that prices may decline at some point.
"The young buyers are really focused on the affordability," says Kelvin Kucey, deputy registrar for regulatory compliance at RECO. "The older ones are saying 'I want top dollar,' and the younger ones are saying 'come on, Grampa.'"
Those in the middle are alarmed about the market overheating: Fifty-two per cent admit to fearing that there is a housing bubble and that it will burst.
RECO says it sponsored the survey in order to better understand the concerns that consumers have about the market.
Mr. Kucey is surprised at the anxiety that young people – defined as those 18 to 34 – have about wading into the buying process, given the vast amount of information that's available.
Middle-aged folks, from 35 to 54, are not as prone to fretting about real estate, but if they do worry, it's about how long their house will sit on the market when they eventually sell. They're also the ones most concerned that the market has formed a bubble and that it will burst.
Mr. Kucey says RECO is not taking the position that there is a bubble, but the question was posed to find out how nervous the respondents are about a potential price correction.
Not surprisingly, the oldest respondents – 55 and up – are the most confident in their knowledge of the buying process and the least concerned about making mortgage payments.
Mr. Kucey says RECO has designed three web pages with information for first-time buyers, move-up buyers and boomers.
The message for first-time buyers is that they have to have a budget and a plan – and to stick with them, he says. "Step away from the emotional nature of buying. We're really trying to focus on the idea of realistic expectations and protecting themselves."
The survey results show 68 per cent of young buyers worry that they will be outbid by others, for example.
Mr. Kucey says that concern sometimes prompts those buyers to strip away all conditions, for example, when making the offer conditional on a home inspection is often more prudent.
When it comes to finding an agent for all age groups, Mr. Kucey was astonished to find that one in 10 don't do any research at all. He explains that 30 per cent of people conduct an online search, 15 per cent will go by lawn signs in the neighbourhood and others will ask for referrals from friends and family. But those that don't do any research just happen upon an agent because they find a flyer in their mailbox, for example.
Mr. Kucey recommends that people ask for referrals and then interview a handful of agents. RECO provides videos and guides with advice on finding an agent. "Nail down what services are going to be provided and at what price," he advises. "Treat it as a job interview."
Mr. Kucey is also intrigued by some of the differences in priorties among people in different parts of the province.
In Northern Ontario, by far the biggest concern is about rising closing costs, with 92 per cent of respondents saying that is their main worry about the real estate market.
Those in Eastern Ontario are more nervous about how long their current home will sit on the market, with 22 per cent marking that as their chief concern.
Residents of the Greater Toronto Area are the most jittery about a downturn: 64 per cent say that's their top worry.
Angus Reid conducted the survey of 800 people who have bought a home within the past two years or are planning to buy one within the next two. The margin of error is plus or minus 3.46 percentage 19 times out of 20.
Meanwhile, data from October's housing sales across the country contributed to fears of frothiness in the Toronto and Vancouver markets.
The Canadian Real Estate Associaton reported this week that national home sales rose by 1.8 per cent from September to October and remained flat with October of 2014. Across the country, CREA says, there was an even split between the number of markets where sales posted a monthly increase and those where sales declined.
Sales edged up about three per cent in the Greater Toronto Area in October compared with the same month last year. In Greater Vancouver, sales jumped 18.5 per cent in the same period.
The Teranet-National Bank house price index shows a 9.3-per-cent jump in October in Toronto compared with the same time last year. In Vancouver, the increase was 9.8 per cent in the same period.
Across Canada, the rise in October was 5.6 per cent compared with October, 2014, but much of the boost came from Toronto and Vancouver, says Captial Economics economist David Madani. Prices in other regional markets are flat or falling, he says.
"Over the past few weeks, even some housing bulls have become more alarmist about the continued upward trajectory of house prices in Vancouver and Toronto, where prices are completely detached from household income fundamentals," he says in a research note. "The concern is that foreign non-resident investors are driving up prices to unaffordable levels for most residents."
Last week, the Organization for Economic Co-operation and Development called for the federal government to adopt measures that would cool down the Toronto and Vancouver markets. The OECD is particularly concerned about the amount of condo building under way in Toronto.