Many Canadians shopping for a home are facing a sobering reality check; roughly 40 per cent discover they're going to have to fork over tens of thousands more than they originally planned.
The phenomenon is most apparent in Toronto, where more than half (57 per cent) of house-hunters say that they've realized they're going to be spending more on a home than they planned once they started looking, according to a new survey conducted for Bank of Montreal. And not just a little more - something in the neighbourhood of $100,000.
But the trend also extends far beyond Canada's most populous city, with a large proportion of buyers across the country experiencing a rude awakening. It speaks to the degree that prices have risen in recent years. Four-in-ten buyers nationally now expect they'll spend more than they first wanted to.
More than one-third of buyers in Montreal now expect to pay more than they originally planned (about $48,000 more on average), as do 47 per cent in each of Calgary and Vancouver (more than $80,000 more).
It doesn't stop there. Almost one-third of buyers in Atlantic Canada expect to pay more, and they've bolstered the amount that they plan to spend by about 32 per cent, meaning they now expect to pay about $72,105 more than they did when they began hunting for a home. In Manitoba and Saskatchewan 44 per cent of buyers expect to pay more, to the tune of more than $85,000.
The vast majority of Canadian home-hunters surveyed said prices have gone up since they started looking, and more than 80 per cent said they now have a better understanding of current prices. Fifty-six per cent of them have saved more for a downpayment.
The reality check has prompted more than half of potential buyers to look at housing types that they didn't plan to consider, or to eliminate their first choice. More are looking at semi-detached homes and townhomes. Three-quarters are worried about the condo market, fearing that it might be overdeveloped or that the units won't hold their value.
Only five per cent of the potential buyers said that they now expect to spend less than when they first started looking.