TORONTO, May 18, 2021 /CNW/ - According to a recent real
estate survey commissioned on behalf of TD, one-third of Canadians
surveyed (32 per cent), are willing to take part in a bidding war
in order to secure their dream home, as housing prices continue to
soar in many markets across the country.
Interestingly, the TD survey also reveals that a homebuyer's
willingness to offer above asking typically varies with age. More
than half (51 per cent) of young adults under 35 are prepared to
offer above list price, while fewer than one-third (31 per cent) of
respondents between 35 and 54, and just 18 per cent of those 55 and
older, are willing to do the same.
The TD 2021 Real Estate survey results arrive alongside
proposed government changes to the qualifying rates for uninsured
mortgage loans. If implemented, the guidelines would require
borrowers to qualify at their mortgage contract rate plus two
percentage points, or 5.25 per cent, whichever is higher. As
housing prices across the country continue to rise, the change is
designed to help buyers avoid over-extending themselves. It also
underscores the need for advice along every stage of the homebuying
process – but particularly when it comes to affordability.
Budgeting for a bidding war
"There's no question that
the price of homeownership is much more than your down payment and
monthly mortgage payments," says Jared
Jarman, Associate Vice President, Specialized Advice at
TD. "In today's competitive environment, buyers need to
ensure they're keeping a close eye on their budget, building in
some wiggle room so that they know they're able to cover expected
and unforeseen costs. A financial advisor can help by working with
you to develop a budget that lets you know how much you may be able
to afford before you begin to house hunt," continues Jarman.
Despite a widespread willingness amongst younger survey
respondents to enter a bidding war, most Canadians are still
reluctant to bid over-asking when multiple offers are on the table.
In this situation, 45 per cent of respondents said they would stand
firm on their initial offer. But for those willing to do what it
takes to win a bidding war, Jarman emphasized the importance of
developing a budget range beforehand that allows for some
flexibility. Even amongst Canadians open to going beyond the list
price for their dream home, budgeting and setting limits is key, he
adds.
The TD survey results also reveal how competitive respondents
are willing to be. According to the survey, approximately two in
ten (19 per cent) of competitive bidders said they would exceed the
asking price by up to $50,000, while
just 13 per cent would push their offer further, between
$50,000 and $100,000 over-asking and beyond.
Affordability and the great unknown
According to TD,
more than half of Canadians surveyed (52%) feel home ownership is
less attainable now than it was pre-pandemic thanks to changing
house prices. Unsurprisingly, the survey also reveals that changes
in financial security over the last year have dampened home-buying
opportunities for many Canadians, with one-third of respondents
saying unexpected changes in their personal finances have made the
prospect of homebuying less attainable now than before the
pandemic.
"We know Canadians have had to deal with incredibly
unprecedented circumstances this past year, including unemployment
and other financial challenges for many," said Jarman, noting that
TD has safeguard options in place to protect borrowers from
unanticipated challenges. "TD Mortgage Protection is just one-way
customers can help protect themselves from unforeseen life events
including critical illness and even death."
Fifty-seven per cent of TD survey respondents said they consider
finding a home within their budget to be the biggest challenge to
buying a home within the next year. The ability to afford a
suitable home appears to be a greater concern amongst residents in
Ontario (63 per cent) and B.C. (62
per cent) compared to Quebec (48
per cent) and the Prairies (43 per cent).
While it's hard to know what comes next, Canadians can trust
that TD has a variety of solutions to help customers achieve home
ownership and protect the homes they've worked so hard to
purchase.
Fast facts from the TD 2021 Real Estate During COVID
survey:
- Among other challenges noted in the survey results were the
uncertainty that comes with the COVID-19 pandemic (15%) and the
lack of housing supply (10%).
- Canadians value their space during the pandemic, and are most
likely to see features like backyard space (43 per cent) and square
footage (40 per cent) as important considerations when buying a
home.
- While the need for space may be unsurprising, Canadians' desire
to be within close proximity to everyday amenities (grocery stores,
banks, etc.) hasn't changed – just over half (51 per cent) compared
to 50 per cent prior to the pandemic.
- Four in 10 (40 per cent) Canadians surveyed who currently own a
house or condo say rising prices in their area would make them more
interested in listing.
When it comes to finding the best mortgage solution, TD offers a
wide array of online services, including the TD Mortgage
Affordability Calculator, which can help determine what Canadians
may be able to afford. Most mortgage applications can also be
completed online with TD, including pre-approval
application and full mortgage application. To learn more
about TD Protection Plans, visit
https://www.td.com/ca/en/personal-banking/products/insurance/credit-protection/.
To get specialized advice to help with your home ownership journey,
visit td.com/ca/en/personal-banking/products/mortgages/.
About the TD 2021 Real Estate During COVID
TD Bank
Group commissioned Ipsos to conduct a national online survey of
1,001 Canadians aged 18+. This poll was conducted between March 31 and April 6, 2021.
About TD Bank Group
The Toronto-Dominion Bank and its
subsidiaries are collectively known as TD Bank Group ("TD" or the
"Bank"). TD is the fifth largest bank in North America by assets and serves over 26
million customers in three key businesses operating in a number of
locations in financial centres around the globe: Canadian Retail,
including TD Canada Trust, TD Auto Finance Canada, TD Wealth
(Canada), TD Direct Investing, and
TD Insurance; U.S. Retail, including TD Bank, America's Most
Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and an
investment in The Charles Schwab Corporation; and Wholesale
Banking, including TD Securities. TD also ranks among the world's
leading online financial services firms, with more than 14 million
active online and mobile customers. TD had CDN$1.7 trillion in assets on January 31, 2021. The Toronto-Dominion Bank
trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
SOURCE TD Bank Group