News segment after news segment, we’ve heard about the financial shock and awe of the housing market throughout the pandemic, and it’s no mystery why. Finding a bright side in home buying news can be challenging when news feeds are full of stories about skyrocketing prices, bidding wars, and pandemic home buying regret after a rushed process.
But is the reality of homeownership for those who broke into the market during this pandemic that bad? We set out to find that by interviewing Canadian homeowners who bought during the pandemic.
In this story:
- With a recession on the horizon, home prices have already declined. Regardless, 63% of Canadians would still be happy in their home even if the real estate market dropped significantly.
- Concerns about homebuyers who moved long distances coping poorly with their new lifestyle seem to be overblown. Instead, 91% of those who moved to a new province are happy with their home purchases today.
- A year ago, waiving financing and inspection clauses were the norm. But, 58% of Canadians who used that tactic in their home buying journey are still happy with their home purchase.
- The same goes for pandemic buyers who offered over the list price to win the bid on their property. Results have 84% reporting they are still happy with their purchase today.
How Did the Pandemic Influence Home Buyers?
When the pandemic broke in early 2020, many Canadians had to switch plans and adjust their lifestyles and livelihood. For many, it wasn’t an easy transition. Those living in smaller homes now found themselves cramped and working from home with a spouse or roommates. Suddenly, square footage mattered more than ever before.
We know that the pandemic influenced what homebuyers want. So much so that it’s in the top 10 features both men and women want when choosing their ideal home.
In many cases, homebuyers found their current living situations weren’t suitable for pandemic living. 55% of homebuyers surveyed reported that the pandemic did influence their decision to buy a home. First-time home buyers were even more impacted by the pandemic, with 60% saying it affected their buying decision.
Some even made big moves they wouldn’t usually opt for, including moving out of the inner-city for more spacious properties. Or, to different provinces for a change of pace and more affordable options. Was there pandemic home buying regret? It turns out, 80% of Canadians who bought during the pandemic are happy they bought a home when they did. Another 84% of these same buyers are satisfied with their home purchase today.
Do People Who Made Big Moves Regret Their Decision?
Don’t expect the pandemic migration to reverse itself anytime soon. While some homeowners found themselves ill-prepared for a lifestyle change, our survey found that most respondents who moved provinces to buy are happy with their choice. Of Canadians who moved over 100 kilometres but stayed within their province, 85% are satisfied with their home purchase today. Of those who moved provinces, 91% are happy.
Nicole Victoria, author of More Money Now: A Millennial’s Guide to Financial Freedom and Security, is one of those buyers. In 2022, her family sold most of their belongings and their home in Ontario to move across the country to a city just outside Edmonton, Alberta.
Of the reasons she’s incredibly happy, Victoria cites less traffic, more affordable housing, gas and childcare, lower taxes, and the ability to achieve their financial goals faster.
She was also a real estate agent in the Greater Toronto Area (GTA). She found that most people who regretted their decision to move to a new city prioritized affordability over their lifestyle.
“In Ontario, for example, if you’re not in Toronto, you’re likely moving to the middle of nowhere just to find a property you can afford,” says Victoria. “Living that far away from a city center can be a difficult adjustment.”
But, in her opinion, you need to consider more than just the price of a home to find a property you love.
84% of Homeowners Still Happy with their Purchase
Although most buyers felt the pinch in a competitive seller’s market and opted to waive financing and inspection conditions, you might think they have pandemic home buying regret. But instead, they still feel confident and happy with their decision.
In fact, of the Canadians who offered over the list price to win the bid on their property, 84% are still happy with their purchase today. Of the Canadians who bought a property sight unseen, 79% are still happy. Buyers who waived essential conditions like financing and inspection didn’t fare quite as well, but 58% are still happy with their home purchase.
As it turns out, the price of your home isn’t the only reason to buy property — even though that’s what many of our parents and financial experts teach us to value as buyers.
Although most buyers know there is the potential to build wealth, they didn’t select that as the main reason they bought their home. Instead, the top reason to buy a home during the pandemic was the need for more space (53%). The second was tiring of renting (43%). Third was the feeling that it was a good investment opportunity (28%).
Historically, homes have been an excellent investment. After all, the demand is always there, and everyone needs a place to live. But, that shouldn’t be the only reason you buy — and the pandemic proves that Canadians value their homes as more than just an investment.
Respondents shared that the top three benefits of owning a home during the pandemic are:
- The flexibility of customizing their own space (52%)
- An opportunity to build wealth and invest (49%)
- A sense of safety and security (47%)
Homeowners Would Still Be Happy Even if the Real Estate Market Sees Significant Drop
With the economy shifting, interest rates rising, and the real estate market following suit, many people feel uneasy about their finances. Prices in 40 of 53 reporting real estate boards across Canada fell this quarter. But this decline was the most significant in Ontario — where for the first time in a long time, homes aren’t selling for ten’s of thousands of dollars over their listing price. In Toronto, for example, in July 2022, the average home price began selling for 2% below ask. In contrast, 48% of Toronto homes sold for 20% over ask in February 2022.
Daniel Foch, a real estate development expert and host of the popular podcast, The Canadian Real Estate Investor, says that you shouldn’t obsess over your home equity unless you’re entering or exiting the market. Instead of being anxious, he says to invest in things you’re passionate about to feel good about your capital.
After all, real estate is highly illiquid. This means that it’s not easy to convert the value of your home into cash — and until you plan to make this conversion, the price of your home shouldn’t matter.
It seems for the majority of homebuyers, it doesn’t. 63% of Canadians would still be happy in their home even if the real estate market dropped significantly.
But that doesn’t mean homeowners don’t worry at all. In fact, 77% of pandemic buyers say that a recession would impact their ability to afford their mortgage.
They also worry about interest rates, with 76% of respondents reporting that rising rates could affect their ability to afford their mortgage when it comes up for renewal. “This is likely because, for the majority of Canadians, most of their household net worth is concentrated in their primary residence,” says Foch.
Owning a Home Helps You Accomplish Your Financial Goals — Especially for First-Time Buyers
Money matters — it’s unavoidable. But, in most cases, buying a home helps you achieve your financial goals. According to respondents, 46% say that buying a home has helped them achieve their other financial goals. Whereas only 17% say it’s hindered their ability to fulfill other financial dreams.
This figure was slightly higher for first-time home buyers, where 52% believe buying a home has helped them achieve their other financial goals.
Pandemic Home Buying Regret is Not That Common
No matter how you spin it, Canadians who bought during the pandemic don’t have home buying regret. Instead, they are happy with their decision — proving that homes are more than just an asset. They are a place to set down roots, build community, create memories, and feel secure and safe.
Survey Details
The survey data used for the 2022 Pandemic Home Buying was collected online between August 3, 2022, to August 18, 2022.
The online survey asked 1,183 respondents a variety of opinion, self-report and knowledge-based questions to measure how they felt about purchasing a home during the pandemic and their opinions today based on the current economic situation and real estate market.
The estimated margin of error is +/- 3 percentage points.
