{"id":13279,"date":"2020-05-13T21:30:00","date_gmt":"2020-05-14T01:30:00","guid":{"rendered":"https:\/\/www.zolo.ca\/news\/?p=13279"},"modified":"2022-01-12T19:42:12","modified_gmt":"2022-01-13T00:42:12","slug":"buyer-intentions-2020","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/buyer-intentions-2020","title":{"rendered":"Homebuyers Hit Pause, but Still Intend to Purchase"},"content":{"rendered":"\n

The coronavirus pandemic dampened the spring homebuying season but, despite a drop in sales activity, it appears buyers still intend to purchase homes this year and into the near future. <\/span><\/p>\n\n\n\n

A recent survey by Zolo shows that even with higher unemployment and uncertain business conditions, buyers still intend to find the dream of their homes. <\/span><\/p>\n\n\n\n

According to the survey, which polled over 2,100 North American households between April 15 to 17, 2020, respondents reported no significant change in their plans to buy a home with 47% planning on buying within the next five years, and another 16% planning to purchase this year.  <\/span><\/p>\n\n\n\n

\"Home<\/a><\/figure>\n\n\n\n

Buyers are interested in this market because they see an opportunity to get into a home at a discounted price, with many expecting a 5% to 10% drop in purchase price if buying this year. In Vancouver, that\u2019s more than $100,000 off the Canadian Real Estate Association\u2019s benchmark price, as of March 2020. In Toronto, the expected price cut is closer to $87,000. <\/span><\/p>\n\n\n\n

Millennials Appear Most Optimistic<\/h2>\n\n\n\n

Of the more than 2,100 respondents, more than 51% were millennials (between the ages of 25 and 39). These respondents appear most optimistic about the purchase of a home, with 30% planning on buying a home in two to three years (16% plan on buying in 2020, while 21% plan on buying within four to five years). <\/span><\/p>\n\n\n\n

The top three reasons for purchasing a home, even during the pandemic, are to stop paying rent (27%) because the home buyer has started or intends to start a family (26%) or a desire for \u201cpermanence and stability\u201d (20%).<\/span><\/p>\n\n\n\n

Prior to the pandemic, 59% of millennials were saving for a home, and 51% of Gen X buyers were saving for a property purchase. After the economic setbacks brought on by COVID-19, 53% of millennials continue to save for a down payment on a home, while only 39% of Gen X buyers continue to sock away cash for a down payment. <\/span><\/p>\n\n\n\n

\"buyers<\/a><\/figure>\n\n\n\n

Turns out more than half (53%) of the millennial respondents were unwilling to buy a home that would force them to spend more than 30% of their income on housing. Gen X buyers were even more unwilling to exceed this budget constraint with 61% reporting they would not buy a home that forced them to pay more than 30% of their income on housing. <\/span><\/p>\n\n\n\n

This diligence about saving for a property purchase may be fuelled by greater awareness about the impact of debt and the dangers of being house-rich and cash-poor.<\/span><\/p>\n\n\n\n

Still, the near-future still holds a number of obstacles for millennial homebuyers. According to survey respondents, the biggest obstacle for millennials buying a home was the need for a larger down payment (33%) followed by the possibility of losing their job (29%). <\/span><\/p>\n\n\n\n

Gen X Buyers Still Want Stability<\/h2>\n\n\n\n

While Gen X Buyers (those aged 34 to 54) appear to be putting their home-buying dreams on hold, they don\u2019t appear to be as worried about their employment. According to respondents, the largest obstacle to purchasing a home was not having a large enough down payment (42%), while the inability to qualify for a mortgage (30%) was the next big hurdle. <\/span><\/p>\n\n\n\n

The two biggest reasons Gen X buyers want to purchase property are to \u201cstop renting\u201d (40%) and to establish some \u201cpermanence and stability\u201d (25%). <\/span><\/p>\n\n\n\n

Online Home Buying Experience<\/h2>\n\n\n\n

Prior to the pandemic, a few tech-savvy real estate brokerages, such as Zolo, were already making the transition to a mobile-friendly home-shopping experience. This emphasis on virtual and online experiences throughout the process of buying and selling a home was made all the more acute as soon as social-distancing and self-isolation became a requirement in order to slow the spread of COVID-19. <\/span><\/p>\n\n\n\n

Turns out, buyers were waiting for this nudge into the virtual world, with 52% of the respondents reporting that they would \u201cprefer to complete the entire home buying process using only online tools.” <\/span><\/p>\n\n\n\n