Fear of missing out, or FOMO, is motivating homebuyers in Canada’s hottest markets, a new survey suggests.
Some 19 per cent of Toronto and Vancouver homeowners say that FOMO played a part in their decision to buy their homes when they did, according to the TD Homebuyer Fear of Missing Out Poll.
And FOMO is also affecting those looking to get into these markets sometime in the future.
The possibility of rushing the transaction process just to seal a deal is a concern for one in five of the prospective buyers who responded to the survey, conducted from February 25 to March 17, of 6,337 Canadians aged 18 and up.
The thought of speeding through this process is not the only cause of anxiety for these possible future homeowners, as 18 per cent are concerned about simply buying too fast so they can beat out competing bidders.
Meanwhile, 13 per cent of not-yet owners are worried about being kept on the sidelines.
“It’s understandable that house hunters don’t want to miss out on buying their dream home, but that shouldn’t come at a cost they can’t really afford,” says Marc Kulac, TD’s associate vice president of Real Estate Secured Lending.
Underscoring the importance of doing research before making a decision, he points to the 40 per cent of prospective first-time buyers surveyed who indicated they were worried they don’t understand the full cost of owning a home.
“There’s more to consider beyond purchase price, interest rate and the monthly mortgage payment,” adds Kulac. “(Buyers) first need to look at their financial reality to determine what they can afford each month along with ongoing expenses (groceries, daycare, transportation and long-term savings goals),” he lists.
If a recent real estate forecast pans out, buyers’ FOMO may only worsen.
In a report published last week, RBC said that it expected Canadian home prices to rise by 3.1 per cent this year, following 2015’s 4.8 per cent increase. Home prices on the national level are heavily influenced by transactions in Toronto and Vancouver.
In Ontario and BC (the bank only forecasts at the provincial level), price gains of 4.5 per cent and 6.4 per cent are expected through 2016.