Stuck at home during periods of lockdown, many Canadians chose to change their surroundings this past year to accommodate their pandemic-related needs, whether it was a place to work from home or a dedicated area for school studies.
Buyers moving out of city communities — a trend dubbed as the Urban Exodus — frequently characterized the frenzied COVID-19 housing market, along with soaring property prices and historically-low interest rates. Now that lockdown measures are subsiding, Toronto-based brokerage Zoocasa wanted to explore how pandemic-driven trends are changing.
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In a report published this week, Zoocasa released its survey results from over 1,400 respondents who were asked about their post-lockdown insights on market affordability, home preferences and remote working. The August answers were then compared to responses collected in February 2021 to weigh up how opinions about the housing market have changed over the last several months.
Low mortgage rates are causing home prices to surge
In March 2020, the Bank of Canada cut its mortgage-influencing overnight rate to 0.25 per cent, subsequently causing lenders to offer record-low mortgage rates and borrowing costs.
The vast majority of those surveyed agreed that low mortgage rates are driving up the cost of homes, with 80.5 per cent of respondents sharing this sentiment. This stance has increased 32.8 percent from February. Just 7.4 per cent of those surveyed disagreed that low mortgage rates are to blame for high prices, up slightly by 4.1 per cent from six months ago.
Slightly less than half of Canadians surveyed (47 per cent) currently agree that low mortgage rates have improved affordability for home buyers, but this is down 3.8 per cent from February. When asked if low rates had helped buyers, 34.4 per cent disagreed with this statement.
Canadians feel squeezed out of smaller markets
Smaller towns and suburban communities have often been known as pockets where affordable home prices can still be found outside of expensive urban areas. According to Zoocasa, this sentiment appears to be waning.
When asked if they felt home prices had increased at unsustainable levels in these areas, 77.2 per cent of respondents agreed, up 25.4 per cent from six months ago. Affordability, bidding wars and timing the market ranked as the top three concerns among respondents at 78.2 per cent, 70.3 per cent and 51.9 per cent.
As the national average home price has increased to over $600,000, Zoocasa noted that buyers need to earn increasingly higher levels of income. Of those surveyed, 56.55 per cent of respondents are looking to buy a home. Fifty per cent of this group expressed that they have a household income of over $100,000. Those who wished to buy a semi-detached house tended to be the most likely to earn six-figures, with 52.5 percent of the group reporting an income above $100,000.
Home office space, private backyards still a buyer priority
Private places to work remotely and enjoy the outdoors were often cited as the top priorities among home buyers during times of lockdown. Although these features are still sought after in homes, their popularity has dropped slightly over the last six months.
Home office space continues to be in demand, with 43 percent of respondents expressing that this is a desirable home characteristic for them. However, this sentiment is down from February by nearly 16 per cent. After COVID-19 lockdown measures, 29.7 percent of those surveyed said that they will continue to work from home, down 7.1 percent from six months ago. More respondents said that they have a hybrid working system between home and the office in place, an arrangement that has grown by 6.4 per cent to 24.2 per cent since February.
Outdoor space — whether it’s a yard, deck or balcony — is still a priority for 65.8 per cent of respondents, down 10.5 per cent from six months ago. Access to delivery service is also still a preference for 55.4 percent of those surveyed, which has dropped 8.1 percent.