Posthaste: Prospective homeowners still want to buy despite rising prices, housing shortages

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Canadians’ homeownership dreams remain steadfast despite rising home prices and a shortage of housing supplies, with 74 per cent of prospective homebuyers still feeling hopeful about purchasing a home within the next five years, according to a new survey by Toronto-Dominion Bank.

But 58 per cent of the 882 Canadians surveyed who intend to buy in the next five years say they will likely take at least two years to be in a financial position to do so.

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They do, however, appear to have plans in place to get there, with 56 per cent of prospective buyers reducing their non-essential expenses and another 52 per cent planning to invest more of their money. Others are planning to work with a financial professional to develop a plan or take out loans. And eight per cent are planning to tap into the rising trend of co-ownership by trying to purchase a home with someone who is not their partner.

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But barriers to homeownership remain, with 95 per cent of prospective buyers saying they have concerns related to mortgages or the homebuying process.

“Navigating the mortgage and homebuying process can be overwhelming for many Canadians,” Natasha Struminikovski, associate vice-president of Homeowners Journey at TD, said in a press release.

There are plenty of negative emotions out there, with 46 per cent of buyers saying they feel stressed, 41 per cent are anxious and 34 per cent feel frustrated in trying to navigate the process and say they would be more confident if they had access to quick advice from a professional.

“For Canadians looking to achieve the dream of home ownership, it’s important to remain patient, stay informed, seek out professional advice and have a plan”, Struminikovski said. “Having these steps in place can help to ease the stress or uncertainty Canadians may be feeling and can also act as a guide for prospective homebuyers along their journey to homeownership.”

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Of the 885 existing homeowners surveyed, 82 per cent of those who bought six years ago said they found the homebuying process “easy,” with 64 per cent of them saying that ease came from being able to secure the home they wanted within their budget.

“The survey results tell us that most Canadians who went through the mortgage and homebuying process at least six years ago felt it was relatively easy, with many finding they were able to afford their desired home,” Struminikovski said. “Today, the reality is quite different for many Canadians.”

Indeed, 76 per cent of prospective buyers are concerned about current home prices and 61 per cent are worried about the present interest rate environment. Another 44 per cent are also anxious about knowing the best time to buy and 36 per cent are anxious about the mortgage options that benefit them the most.

“With all the challenges prospective homebuyers face in 2024, access to trusted advice is needed now more than ever,” Struminikovski said.

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Royal Bank of Canada’s landmark deal to acquire HSBC Holdings PLC’s Canadian division led to the country’s first decrease in foreign direct investment in 14 years. Foreigners withdrew $6.2 billion in direct investment funds in the first quarter, Statistics Canada said Thursday. That’s the first such outflow since 2010.

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The number was driven by a divestment of $11.1 billion in assets from foreign investors via merger and acquisition activities, the agency said. At the end of March, Royal Bank closed its purchase of HSBC’s Canadian assets for more than $13 billion. That’s recorded in the current account data as foreign direct investors selling existing assets back to Canadian investors. — Bloomberg

• Today’s Data: Canada Real GDP for Q1, monthly real GDP for March, Ottawa’s fiscal monitor for March, U.S. personal income and consumption for April, Chicago PMI for May
• Earnings: Canadian Western Bank, Laurentian Bank of Canada, BRP Inc.

If you’re a recent post-secondary graduate who is trying to decide what to do for the rest of your life, or know of one, you’re not alone. Transitioning from two decades of the structure that comes with formal education to managing your life on your own can be a significant adjustment. There’s no one-size-fits-all answer to what comes next after graduation because everyone’s path is unique, and today’s grads will likely have two or even three significant careers before they retire. But as you make choices that align with your goals and values, there are several financial considerations to keep in mind. Credit counsellor Sandra Fry outlines five of them.

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Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line with your contact info and the gist of your problem and we’ll try to find some experts to help you out, while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers, led by Julie Cazzin, can give it a shot.

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Today’s Posthaste was written by Noella Ovid, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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