COVID Impacts Housing Market Outlook

While COVID is affecting the experience and expectations for first-time homebuyers, many continue to have a positive short-term outlook on the housing market, says a BMO survey. On average, first-time homebuyers are looking to spend roughly $432,000 on their first home and more than 40 per cent indicate that now is a good time to buy. Buyers in Alberta and the Prairies are the most optimistic about their housing markets with 60 per cent feeling that it is a good time to purchase a home, says the ‘BMO First-Time Home buyers Survey.’ The most pessimistic buyers are in Ontario and British Columbia, with only 33 per cent of first-time buyers showing optimism about their markets. However, COVID-19 has shaken up where and what type of home is going to be purchased. Twenty-nine per cent of first-time homebuyers are changing their search from a major city to the suburbs or a rural area. As well, with working from home becoming more prevalent, a quarter of prospective buyers are moving their search away from a condo or townhome to a detached home. "Even with a global pandemic as our backdrop, we're encouraged to see Canadians maintaining their optimism on our housing market," says Hassan Pirnia, head of personal lending and home financing products at BMO Bank of Montreal. "While many buyers are viewing the market favourably, households are facing stronger headwinds than they have in the recent past. As buyers look to enter the market, we should expect to see a continued trend where they are exploring different financial options to help with the purchase."