A new survey by Canada Mortgage and Housing Corp. (CMHC) found that 85% of first-time homebuyers are spending the maximum amount they can afford on a property.
The results come from CMHC’s annual mortgage consumer study. And, despite maxing out their budgets to purchase a home, 76% of survey respondents said that they are confident they will be able to make their monthly mortgage payments going forward.
Sixty per cent of first-timer homebuyers and 69% of repeat buyers reported having "sufficient assets" such as investments or other properties to help them if they run into financial trouble with their mortgage.
The federal housing agency, which has been conducting the survey since 1999, says housing affordability continues to be the most important factor cited among first-time and repeat homebuyers, when compared to other factors such as a property's neighbourhood, proximity to work and the overall condition of a building.
More than half (50%) of people surveyed said their top worries when it comes to buying a house include unforeseen costs, paying too much for their home initially and rising interest rates. The Bank of Canada has raised its key interest rate target four times in the past 18 months to 1.5% today. The central bank is expected to announce another rate hike at its meeting on October 24.
The CMHC survey found that despite all the potential pitfalls and concerns, 80% of homebuyers who were surveyed still believe that buying property is a good long-term financial investment.
