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The Home Buying Process - Canada - May 2017

Published By :

Mintel

Published Date : May 2017

Category :

Wealth Management

No. of Pages : N/A

The majority of Canadians expect proactive government policy intervention to cool overheated real estate markets, with the Greater Toronto Area being the most likely significant source of economic spillover effects if there is a noteworthy market correction.

Table of Content

OVERVIEW
Regional classifications
Income

EXECUTIVE SUMMARY
The issues
Around three in four Canadians believe house prices are over-valued
Figure 1: Attitudes about the Canadian real estate market, March 2017
Home purchase reasons are strongly age dependent
Figure 2: Reasons for home purchase, March 2017
Young male mortgage holders most likely to be impacted by higher rates
Figure 3: Attitudes about mortgages and financing, March 2017
Almost half of renters view it as a lifestyle choice
Figure 4: Agreement with statements related to renting behaviours, March 2017
The opportunities
Leveraging branch networks to sell and service mortgages
Marketing the services of mortgage brokers
Digital application apps and other tools to help first-time buyers
What it means

THE MARKET – WHAT YOU NEED TO KNOW
Canadian economy has a strong start to 2017
BC Government’s foreign home buyers tax
Canada’s changes to housing rules
Ontario increases tax refund for first-time home buyers
Ontario unveils new tax on foreign buyers and expands rent control in bid to cool housing market

MARKET FACTORS
Canadian economy has a strong start to 2017
Housing sector to experience continued growth
Figure 5: Best- and worst-case forecast value sales of housing, at current prices, 2011-21
Rental vacancy rate slightly higher

WHAT’S WORKING AND WHAT’S NOT
What’s working
BC Government’s foreign home buyers tax: impact on Vancouver home prices
What’s facing challenges
Changes to Canada’s housing rules
Ontario unveils new tax on foreign buyers and expands rent control in bid to cool housing

WHAT’S NEXT
Real estate sales activity in 2017 to mainly decline
Impact of new guidelines on the real estate market
BC Government’s foreign home buyers tax
Ontario increases tax refund for first-time home buyers

KEY PLAYERS – WHAT YOU NEED TO KNOW
Alterna Bank introduces Canada's first fully digital mortgage application
CIBC releases iPhone app to apply for a mortgage
National Bank shuts down its mortgage broker division
Mogo moves into the mobile mortgage market

INDUSTRY DEVELOPMENTS AND INNOVATIONS
CIBC releases iPhone app to apply for a mortgage
National Bank shuts down its mortgage broker division
Scotiabank teams up with Toronto AI startup, DeepLearni.ng
Credit Karma crosses the border to Canada
Fintech firm buys home improvement financing assets from TD Bank
Alterna Bank introduces Canada's first fully digital mortgage application
Mogo moves into the mobile mortgage market
Dominion Lending Centres launches ‘Our House’ campaign

MARKETING CAMPAIGNS
Select campaigns from Mintel Comperemedia
Scotiabank’s emotional appeal to look beyond rates
Figure 6: Scotiabank mortgage print advertisement, April 2017
RBC connects with realtors
Figure 7: RBC realtor appreciation week print advertisement, April 2017
PC Financial combines a competitive rate with grocery points
Figure 8: PC Financial mortgage email mortgage offer, September 2015

THE CONSUMER – WHAT YOU NEED TO KNOW
Three in ten Canadians have an outstanding mortgage
Around three in four Canadians believe house prices are over-valued
Home purchase reasons are strongly age dependent
Young male mortgage holders most likely to be impacted by higher rates
Almost half of renters view it as a lifestyle choice
Most mortgage related transactions are conducted face-to-face

HOME OWNERSHIP AND PURCHASE INTENTION
Three in ten Canadians have an outstanding mortgage
Figure 9: Home ownership and purchase intention, March 2017
Around half of higher income 35-54s have a mortgage
Figure 10: Mortgage ownership, by age and income, March 2017
Quebecers more likely to have bought a resale home/condo
One in three 18-34s intends to buy a home in the next three years
Figure 11: Home buying intention (next three years), by age, March 2017
Around three in four Canadians believe house prices are over-valued
Figure 12: Attitudes about the Canadian real estate market, March 2017
British Columbians and Ontarians most likely to feel the impact of speculators
Quebecers relatively less inclined to feel that home ownership for first-time buyers has become unaffordable
Six in ten Canadians favour government policy intervention to cool over-heated markets

HOME BUYING
Home purchase reasons are strongly age dependent
Figure 13: Reasons for home purchase, March 2017
TURF analysis
Methodology
Space and the need for a first home account for about half of the reasons motivating home purchase
Figure 14: TURF analysis – Home purchasing reasons, March 2017
Women and younger Canadians more interested in paying a fee for a one-stop home purchase service
Figure 15: Attitudes about the home buying process, March 2017
Older Canadians and women more likely to favour using a real estate agent

MORTGAGE FINANCING
Older mortgage holders more likely to prefer getting a mortgage from their main bank
Figure 16: Attitudes about mortgages and financing, March 2017
Leveraging branch networks to sell and service mortgages
Young male mortgage holders most likely to be impacted by higher rates
Marketing the services of mortgage brokers
18-24s are most open to borrowing from private lenders

MORTGAGE CHANNELS AND ACTIVITIES
Most mortgage related activities conducted face-to-face
Figure 17: Channels used for mortgage related activities, March 2017
Correspondence analysis for mortgage activities
Methodology
In-person dealings are dominant in mortgage activities
Figure 18: Correspondence analysis, mortgage channels, March 2017
Men perform more mortgage related decision making
Quebecers are less likely to use online channels
Figure 19: Use of online channel for mortgage activities, significant differences, Ontario vs Quebec, march 2017
Older mortgage holders favour in-person mortgage transactions
Figure 20: Use of in-person channel for mortgage activities (select), by age, march 2017
Younger mortgage holders more likely to use the online channel
Figure 21: Use of online channel for mortgage activities, by age, march 2017

BEHAVIOURS AND ASPIRATIONS OF RENTERS
Almost half of renters view it as a lifestyle choice
Figure 22: Agreement with statements related to renting behaviours, March 2017
Around a third of renters are renting as they haven’t saved enough for a down-payment
One in five renters aged 35-54 is wary of the current state of the real estate market
Older renters are less enamoured with home ownership
Figure 23: Agreement with statements related to home ownership, March 2017

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

List of Table

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