The amount of Canadians willing to enter a bidding war just to ensure they get the home of their dreams is declining. But the fact that one-quarter of homebuyers will still pay up to 20 per cent more for a home doesn’t bode well for the historically high levels of debt Canadians are currently in.
The fact that 25 per cent of Canadian homebuyers are willing to enter a bidding war is just one result recently revealed by a BMO Bank of Montreal study. The study surveyed Canadians to find out not only whether they would enter a bidding war, but once in one, how much they were willing to go over the asking price of a home. Of the one-quarter Canadians that are willing to go to war at all, half of them were willing to pay up to 10 per cent of a home’s asking price. The margin gets smaller when you go up to 20 per cent over the asking price, but just narrowly, with 25 per cent of people also willing to pay that much more.
The survey even goes one step further, and breaks down homebuyers by province, to see where the most willing buyers are; and they also break it down into sex, seeing who’s looser with the purse strings – men or women.
Interestingly enough, even though some consider Quebec the poorest province when it comes to debt owed per capita, residents here are the most likely to pay up to 10 per cent over a property’s asking price. Meanwhile in Ontario, which is the province that actually has the most amount of debt, 32 per cent of individuals are willing to get into a war at all. That number’s tied with Alberta, B.C., and Atlantic Canada.
And it seems as though men are also usually more willing to fight for a good home than women. While 34 per cent of men said in the survey that they’d pay up to 20 per cent of a home’s asking price, only 20 per cent of women said the same thing.
At a time when household debts are at an all-time high, and has been continuously stated as being the biggest threat to our domestic economy, these findings certainly don’t bode well for the situation. Paying more money for a home may not seem like a huge deal right now, but Bank of Canada governor Mark Carney has indicated that interest rates are likely to go up by the end of next year.
And even though Finance Minister Jim Flaherty’s mortgage rules have helped cool the market as they were intended, the fact that many Canadians are still willing to pay over a home’s value seems a bit counterproductive.
Still, it is only one-quarter of Canadians that said they’d go to war at all. Is that really a number that we should be concerned about? Won’t there always be a certain portion of buyers on the market that are willing to pay just about anything once they’ve found the home of their dreams? What do you think? And, does it surprise you that men are more willing to go the distance than women are, when it comes to the price of a home?