For three in four Canadians who are not homeowners, entering the real estate market seems out of reach, according to a new survey.
A CIBC survey released Thursday shows that 76% of Canadians who are non-homeowners believe that homeownership is a distant dream, but more than half of them are clinging to their goal of one day own a home.
At least 70% of non-owner respondents cited market overvaluation as one of the main obstacles. The inability to save for a down payment was also cited as a significant obstacle by 63% of them, the bank said.
Measures for first-time buyers
The same day the survey was released, the federal government announced it would allow 30-year amortization periods on insured mortgages for certain first-time home buyers purchasing a newly constructed home.
Finance Minister Chrystia Freeland also said the government would nearly double the amount first-time home buyers can withdraw from their Registered Savings Plan from $35,000 to $60,000. retirement (RRSP) to buy a house.
This new measure will come into force on April 16, the day the federal budget is expected to be published.
Heavy rates for owners
Aside from potential buyers feeling priced out of the market, the CIBC survey also shows many homeowners have cut back on spending as they face challenges due to higher interest rates.
The financial institution mentions that 51% of variable rate mortgage holders surveyed said they had reduced their daily expenses, while 21% said they were making lump sum payments on their mortgage.
At least 45% of homeowners with fixed-rate mortgages anticipate they will reduce their daily expenses as their loans mature over the next two years.
The survey also found that 55% of non-homeowners said they could only afford a new home with an inheritance or gift from family.
One in four non-homeowners also said they were considering buying a home with friends so they could get into homeownership.
The poll was conducted for CIBC in February by Maru Public Opinion. The survey was conducted in two waves among a random sample of Maru Voice Canada panelists.