"The needs of consumers evolve as they enter different phases of life and therefore their concerns about buying and selling change too," says Kelvin Kucey, Deputy Registrar, Regulatory Compliance, RECO. "Consumers should take the time to get informed about the process of buying and selling a home and know that a registered real estate professional is a valuable partner when trying to navigate the real estate market."
RECO regulates real estate professionals in the province and protects the public interest through a fair, safe and informed marketplace. RECO sponsored this recent survey as part of Financial Literacy Month to reveal and better understand the concerns and questions that consumers have about the current real estate market. The research surveyed 800 Ontarians who indicated they have bought or sold in the past two years or are considering buying or selling real estate within the next two years.
Despite 87 per cent of Ontarians indicating they feel they are knowledgeable about the process of buying and selling a home, most still have significant financial concerns and anxieties around the process. Three quarters (74 per cent) worry about being able to afford the home they would like and 68 per cent worry about the cost of renovations and upgrades to the home they buy.
Age differences - The survey shows that the major concerns of Ontarians vary significantly among different age groups.
The survey revealed that 70 per cent of young people (ages 18-34) are anxious about not being properly informed about the buying or selling process. Other top concerns are centered on affordability:
- 84 per cent worry that they won't be able to afford the home they would like to buy.
- 76 per cent report they are concerned about affording possible costs of home repairs and renovations.
- 60 per cent weren't sure if they could afford monthly mortgage payments on the home they buy.
- 68 per cent are concerned about being outbid by others.
Ontarians aged 35-54, many of whom have already bought and sold their first homes, have fewer concerns than younger respondents. Their biggest concerns are very different from the other groups.
- They are the most concerned with how long their home will sit on the market when they go to sell (57 per cent).
- 42 per cent are concerned about whether to buy their new home before selling their current home.
- This age group is the least concerned (52 per cent) that the real estate bubble will burst.
Overall, survey respondents aged 55 and older were the most confident in their knowledge of the home buying process (95 per cent) and have the fewest concerns compared to the other age categories.
- They are the least concerned about making poor financial decisions because they were not well informed (33 per cent) and being able to afford mortgage payments (15 per cent).
- However, almost seven in ten boomers and seniors are concerned about getting the most value from their current home, while almost half (48 per cent) worry about the real estate bubble bursting.
Geographic differences - The survey also revealed that top concerns varied across regions:
- Respondents in the GTA are the most concerned that the real estate bubble will burst (64 per cent).
- The survey shows that residents in southwestern Ontario and eastern Ontario are the least concerned about being able to afford monthly mortgage payments (35 per cent and 33 per cent respectively).
- Eastern Ontario respondents are more concerned with how long their current home will sit on the market (62 per cent).
- Respondents from northern Ontario are the most concerned of all regions about the rise in closing costs (92 per cent)
Changes in the real estate market - Whether it's a first-time buyer or someone more experienced with the process, Ontarians agree that the real estate market has changed in the last five years.
- More than half (56 per cent) of Ontarians think that the process of buying and selling a home has gotten more complicated over the last five years, while 70 per cent think the financial risks have increased.
- 90 per cent state that technologies like online searches, documents and payments have changed the real estate market.
Finding the right registered real estate professional - Part of making the right real estate decision is working with the right real estate professional for your needs. Word-of-mouth from friends and family is how nearly two thirds (58 per cent) of Ontarians find and select a real estate professional.
- Almost one third (30 per cent) of Ontarians use online search while 15 per cent still refer to real estate professional lawn signs.
One in ten (9 per cent) of Ontarians did not do any research at all.
"It's important to be thorough in your search for a real estate professional. A good place to start is by asking friends and family for referrals and meet with at least three candidates," says Kucey. "Ontarians can go to RECO's website to check the status of registered real estate professionals and find out what questions they should ask before deciding whom to hire."
RECO Financial Literacy Month Public Education Campaign
In addition to survey research, RECO's public education campaign features a suite of consumer information including:
- Three new RECO web links featuring helpful information, advice and insights that are relevant to consumers with different real estate questions and needs.
- Recently engaged? Newlyweds planning for the future? Anyone who is considering buying their first property can visit www.reco.on.ca/firsttimebuyer.
- Home owners who are looking to sell their current home and buy a new one, perhaps to accommodate a growing family, can go to www.reco.on.ca/family for valuable information.
- Boomers who are considering a real estate change such as downsizing can find articles and helpful information at www.reco.on.ca/boomer
- Information about buying and selling a home
- Shareable content and facts through Facebook and Twitter
About the survey
From October 21 to October 26, 2015 an online survey was conducted among 800 randomly selected Ontario adults who have either purchased their home in the past 2 years or are planning to buy a home in the next two years, and who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 3.46%, 19 times out of 20. The results have been statistically weighted on age, gender, and region to be as representative as possible of recent and imminent home buyers. Discrepancies in or between totals are due to rounding.
RECO regulates the real estate profession in Ontario. RECO is responsible for administering the Real Estate and Business Brokers Act, 2002 (REBBA 2002) and associated regulations on behalf of the provincial government. In order to trade in real estate in Ontario, brokers and salespersons must be registered under REBBA 2002. RECO's mission is excellence in the delivery of regulatory services that protect the public interest and enhance consumer confidence in the real estate profession. For more information, visit www.reco.on.ca.