According to data compiled during a recent survey administered by TD Bank, 32% of Canadians are willing to engage in bidding wars for their dream homes, as house prices keep rising in several Canadian housing markets.
The survey revealed that a prospective buyer's readiness to go well-over asking usually varies by age group. Over half of respondents of adults aged 35 and younger are willing to offer above listing price, a third of respondents between the ages of 35 and 54, and just under 20 percent of those the over 55 age group, are prepared to do the same.
The survey's results are accompanied by proposals for changes to qualifying rates for uninsured mortgage loans, if said changes were to be enforced, budding borrowers would be required to qualify at the mortgage rate figure, with an additional two percentage points, or a 5.25 per cent rate, whichever of the two are higher. With housing prices rising in countless markets across the country, the proposed change is meant to help borrowers avoid biting off more than they can chew financially.
"In today's competitive environment, buyers need to ensure they're keeping a close eye on their budget, building in some wiggle room so that they know they're able to cover expected and unforeseen costs. A financial advisor can help by working with you to develop a budget that lets you know how much you may be able to afford before you begin to house hunt," says Jared Jarman, Associate Vice President, Specialized Advice at TD.
Even with the younger respondents indicating a desire to engage in bidding wars, the majority of Canadians remain reluctant to offer over-asking in multiple bid situations. In this instance, 45 percent of respondents said they would sit firm on their initial offering.
The survey also illustrates just how aggressive respondents are willing to get. Just about 20 percent said they would offer $50,000 over asking if need-be, 13 percent would pony up even further, offering $50,0000 and $100,000 above-asking and beyond.
As per survey data, over half of respondents look at home ownership as more unattainable now than in pre-pandemic times, with thanks to increases in house prices. The survey reveals how changes in financial stability during the pandemic have lessened probabilities of successful home-buying - one third of respondents cited how unforeseen changes in finances have made home ownership a distant reality.