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Despite rising prices, interest in home buying in major cities has increased by 5 percent since last year

Publication date:

April 25, 20225 days ago2 minutes read 6 comments A person looks at real estate bulletins in Toronto. A person looks at real estate bulletins in Toronto. Photo by Peter J. Thompson/National Post

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As Canadians are being called back to their inner-city offices in the post-pandemic recovery, a new survey has found homebuyers are also turning their attention back to major urban cities.

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The Bank of Montreal, in its latest home finance survey, found that the so-called “urban exodus” that began in the early days of the pandemic is slowing, with interest in home-buying in major metropolitan areas declining since last time has risen five percent year despite rising prices.

“Market conditions are changing rapidly,” said Robert Kavcic, senior economist at BMO Capital Markets, in a press release. “We could see much more balanced conditions very soon as the Bank of Canada is expected to continue raising interest rates through the end of the year. That will hurt affordability and potentially dampen market psychology.”

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Kavcic added that economic fundamentals are strong enough to support the housing market in the long term thanks to a stable job market.

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The majority of survey respondents (83 percent) expect home prices to continue to rise over the next year as inflationary pressures continue to make Canadian homes more expensive.

“When consumers consider buying a home, they have to deal with rising costs on multiple levels,” said Hassan Pirnia, head of personal loan and home finance products at BMO Financial Group, in a press release. “These financial hurdles are having a major impact on these consumers’ purchasing plans, what they will buy and when they will buy. Most understand that they need to spend more; Impact on schedules is divided, with some buying earlier before prices continue to rise and others waiting to see if prices fall.

BMO’s survey found that the expected amount to pay for a home has increased by $100,000, a 26 percent increase from the previous year. On average, homebuyers across the country now expect to pay $588,000 for a home.

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