A quarter of Canadians say they are looking to buy a home, with many noting their local housing market is becoming a buyer's market. But most prospective buyers say they plan to wait until next year to purchase, reflecting broad uncertainty about the future of the country's housing market.
Atlantic Canadians were most likely to be planning to purchase a home, according to a new poll of home buyers for Royal Bank of Canada. More than 60 per cent of potential buyers in the region, the highest in the country, said they intended to purchase a home this year rather than wait.
Falling oil prices have put a damper on housing markets in Alberta, where 35 per cent of residents expect prices to drop further. More than 40 per cent of Albertans say the province is now in a buyer's market, compared with just 22 per cent when the bank surveyed Albertans last year.
Even as many in Alberta expect home prices to fall, 27 per cent said they also planned to buy a home within the next two years, down from 28 per cent last year. More than half of those prospective buyers said they planned to wait until next year. Nearly 60 per cent of potential buyers in Manitoba and Saskatchewan also said they planned to wait and see what happens to the housing market before making a purchase.
"The willingness to wait to buy a home is due to strong sentiment, particularly in Western Canada, about a potential drop in home prices," the bank said. Potential buyers were also concerned about the strength of the economy and affordability.
Rising home prices are top of mind for prospective buyers in Ontario and B.C., with roughly 45 per cent predicting that prices would keep on rising next year. Another 45 per cent said they were concerned that homes are becoming unaffordable.
Nearly 45 per cent of Canadians who said they planned to buy a home were first-time buyers, roughly the same proportion as last year. Among those who said they were planning to wait to become homeowners, half said it was because they hadn't saved up enough for a down payment, while nearly as many said they didn't earn enough money. More than a quarter were also worried about their job security and their existing debt levels.
Ipsos Reid conducted the poll of 2,000 Canadians in February on behalf of the bank.