Interest in purchasing a home in major city centres increase: BMO Survey

Despite the increasing housing costs and rising inflation, interest in purchasing a home in major city centres has increased by five per cent since last year, according to BMO’s latest housing survey.Major cities continue to be the most popular destinations, while a preference for moving further from the city has seen a decline this year.

“Market conditions are quickly changing,” said Robert Kavcic, Senior Economist, BMO Capital Markets. “We could see much more balanced conditions very soon, as the Bank of Canada is expected to raise interest rates further through the remainder of the year. That will bite into affordability and possibly temper market psychology. Longer term, underlying fundamentals are still strong thanks to a firm job market and demographic support.”

The 2022 survey found that savings activity during the pandemic and soaring housing costs across Canada have triggered a change in purchase plans for homebuyers, specifically when they will buy and how much they will spend:

  •  68 per cent of home buyers are willing to change how much they spend on the purchase of their house.
  • 73 per cent of those are willing to spend more on their purchase, primarily because the prices have gone up (55 per cent); a quarter have more income (28 per cent) and more savings because of the pandemic (27 per cent).
  • More than half (55 per cent) of the home buyers said that they will use most or all of their increased savings for their down payment.
  • 52 per cent of homebuyers reported using their increased down payment to spend more on their house and get a bigger mortgage, a significant increase of 20 per cent since last year.
  •  More than one third expect to have a down payment of 10 per cent or under, with more than two fifths depending on help from family to get it.

“As consumers consider buying a home, they have to deal with rising costs on a number of levels,” said Hassan Pirnia, Head of Personal Lending & Home Financing Products, BMO Financial Group. “Three-quarters of homebuyers expect the cost of housing to continue to increase in the next year; four-fifths (84 per cent) expect inflation to continue to rise and three-quarters expect further interest rate increases. These financial hurdles are having a major impact on the purchase plans for these consumers, in terms of what they will buy and when they will buy. Most understand that they will need to spend more; the impact on timelines is split, with some buying sooner before prices go up more, and some holding off to see if prices come down.”

The survey found that over the past year, the expected amount to pay for a house has increased by $100,000, up a significant 26 per cent. On average, home buyers across the country are expecting to pay $588,000.

AVERAGE AMOUNT EXPECTED TO SPEND ON NEW HOME BY REGION 2021 vs. 2022

Province 2021 2022
B.C. $645K $768K
Alberta $397K $428K
Prairies $310K $401K
Ontario $582K $790K
Quebec $374K $454K
Atlantic $223K $355K


For homebuyers, getting pre-approved provides a cushion for due diligence when purchasing a home. According to the survey, 30 per cent of buyers are already pre-approved, up 8-points from last year, and 43 per cent plan on getting pre-approved.

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