Canadians still exhibiting strong interest in purchasing real estate
At the end of January, approximately 60% of Canadians were looking to buy new property, while nearly 58% said they preferred to use a 5% down payment, according to online brokerage nesto.
Quebec and Ontario were the main drivers of these trends, with 65% to 70% of nesto’s new property application requests from these markets being from users who have just started looking for a home.
nesto aadded that the COVID-19 pandemic remains a major factor in consumers’ general habits and will continue to impact home-buying patterns for the foreseeable future.
“Mortgage rates are still going down, despite the fact that we thought they were already at the lowest they could possibly be in 2020, and it certainly influences our Canadian users’ behavior as well,” nesto said in its analysis.
Record-low rates will also continue to motivate market activity. nesto reported that its best insurable variable rate is now at 1.3%, which was fully 1.65% lower than the level seen just a year prior.
“Fixed and variable rates for the same category (insured or insurable) remain close to each other, especially insured rates, with only a 0.04-0.1% difference between them compared to the usual 1.00% in previous years,” nesto said.
The brokerage pointed to a crucial difference between the current market and the conditions of years past.
“In a normal environment, lenders could and likely would increase the discount offered with their variable rates in order to increase the attractiveness of the product and balance their fixed vs. variable selling ratios,” nesto said. “Today, we’re not seeing enough reduction to the variable discounts in order to influence consumer decisions.”