The Association des professionnels de la construction et de l’habitation du Québec (APCHQ), the Québec Federation of Real Estate Boards (QFREB) and the Fonds immobilier de solidarité FTQ released the results of a survey conducted by the firm Léger. Last fall’s survey focused on buying and selling intentions in Québec’s real estate sector. The results indicate that despite tighter mortgage rules, rising interest rates and increasing property prices, 23% of Québec households intend to buy a residential property within the next five years.
In Québec, 46% of households aged 18 to 34 intend to buy within the next five years. Many “millennials” continue to believe in the importance of home ownership in providing a better quality of life as well as a long-term investment.
Single-family homes are still the choice of preference by 65% of households that intend to buy within the next five years, a rate that reaches 69% for the 18-34 age group. Both young and older adults prefer to buy existing homes as they are perceived as more affordable than newly built properties. Of those who want to buy an existing home, 65% plan to invest an average of $14,500 in renovations. Households choosing a newly built home (20%) do so because they are delivered turnkey and better meet their search criteria. The four main considerations when buying a property are: price, proximity to services (restaurants, grocery stores, shops, hospitals, etc.), choosing a safe neighbourhood and distance to the workplace.
The suburbs are attractive to young adults. Across Québec, 53% of the 18-34 age group prefer the suburbs, especially for reasons of price. Of those who bought a property between 2013 and 2018, 74% opted for the suburbs. Moreover, 30% of 18-34 year olds would choose to live in a city centre if prices were more affordable.
The survey shows that 9% of respondents have the intention of buying a property for the purpose of renting it out, an increase of 2% compared to the 2016 survey. Even though the 35-54 age group has the greatest interest in investing in a rental property, 9% of the 18-34 age group are also interested in reaping the rewards of this type of property. However, most households (85%) intend to buy a principal residence.
“The job market is excellent, so despite the tighter mortgage rules by the federal government and rising interest rates, the purchase of a property remains a realistic goal for young people, which the record activity of real estate brokers confirms,” stated Yanick Desnoyers, Manager of the QFREB’s Market Analysis Department.
The study indicates that the majority of buyers prudently manage their loan. The survey finds that 84% of first-time homebuyers obtained a mortgage on their initial application. As for “millennials,” 81% qualified on their first request and only 3% said they had to choose a cheaper property because they did not qualify the first time they applied for a mortgage.
Another finding, a large percentage (43%) of those who bought a property in the last five years managed to pay more than the required 20% down payment, which saved them from having to take out mortgage insurance. The down payment remains difficult for the 18-34 age group as 76% of them cannot put together the 20% necessary for the purchase of a property. Personal savings are the primary source of a down payment for 45% of households, followed by the Home Buyers’ Plan (HBP) at 30%. Gifts (9%) and loans (4%) from relatives and friends are also one of the main sources of the down payment.