Single Canadians, despite having low debt and sufficient means to purchase a home, are reticent about becoming homeowners.
That’s according to a REMAX survey conducted by Leger Marketing, which determined that only 26% of single respondents are considering a purchase. While that number increases slightly to 34% in Atlantic Canada, 52% of respondents are concerned by exorbitant home prices as well as questions pertaining to long-term economic robustness.
However, according to Christopher Alexander, REMAX Integra’s vice president and regional director for Ontario-Atlantic Region, purchasing a home would be daunting to anybody with only a single income.
“They see real estate as a good investment, and affordability plays a role, but buying as a single person is more ambitious than buying with a partner,” he said. “Government regulations have put up some barriers and first-time homebuyers find it difficult to enter the market because of the mortgage stress test. From the survey, it still looks like the dream of homeownership for singles is really strong.”
Single-family detached homes are the most popular housing type among single buyers, however, it’s instructive to note that only 12% of respondents expressed such interest.
“Most are okay with smaller living space because they’re just one person,” said Alexander. “A lot of them buy for the sake of owning real estate and renting it out. I think getting their heads around the costs and borrowing ratios is harder than someone in a partnership because there’s only a single income, and as a result, they’re much more conscious and typically take longer to make decisions.”
An encouraging sign is that 43% of respondents are carrying less than $5,000 of debt, meaning homeownership—should they decide they’re ready—will not be as proscriptive.
“Their debt levels are modest compared to national levels. They’re living within their means.”
Elan Weintraub, a mortgage broker and director of Mortgage Outlet, says the survey results make sense because of how intimidating the price of a home can be on a single income, but other factors compound the difficulties, as well.
“If you’re married and have a double income, you have more security, but on a single income it might be scarier for you to jump in all by yourself,” he said. “Then you have the stress test to deal with and Bank of Canada interest rates have risen, making it harder. It’s scary for first-time buyers to come in and buy a condo for $600,000 or $700,000.”