Homebuyer intentions still strong, though buyers remain cautious – and discerning

Prospective homebuyers in and around the GTA may be somewhat cautious with their purchasing intentions as 2021 approaches, given all that continues to unfold with COVID-19.

Still, it’s clear that the “pent-up demand” many observers cite is out there, according to the NextHome Real Estate Survey. And buyers seem to be using this time of uncertainty to figure out what they want, where they want it, and what they’re willing to pay for it.

And let’s just say they appear to be becoming a little more discerning.

Results of the survey highlight a number of interesting points:

• Aside from COVID, affordability is the greatest concern among prospective homebuyers, as 33.9 per cent cite it as the top reason they may not buy a home in 2021
• Single-detached homes are the ideal home type, with 54.83 per cent saying that’s what they’re planning to buy; followed by condominiums at 21.38 per cent
• Areas outside the 416 and 905 area codes are of growing interest, as 53.29 per cent indicate that’s their target market
• COVID is giving some buyers pause, but still, 39.74 per cent of respondents, the largest group, say they plan to move forward with their plans, but are making doubly sure their finances and employment are secure; the next largest group, 24.04 per cent, say the pandemic is not affecting their plans at all
• Look, touch and feel of a potential new home are still important, as only 6.7 per cent of respondents say they are comfortable buying completely virtually
• Fully 46.3 per cent of respondents say they are planning to buy a new home or condo in 2021
• Proximity to greenspace and other natural amenities is top of mind for 51.61 per cent of buyers – the second most important determining factor after price

It’s difficult to compare the results of this latest survey with polls conducted earlier by NextHome and Condo Life, given the state of flux of the COVID restrictions and their impact on the economy and housing. But one thing is clear: When the pandemic is over, homebuyers still hope to achieve their new-home dreams – though their demands may be changing.

NextHome Real Estate Survey

1. Are you planning to buy a new home or condo in 2021?
No 53.67%
Yes 46.33%

2. If you were but are no longer planning to buy a home in 2021, what is the reason?*
Affordability 33.94%
Concern about the economy due to COVID-19 26.70%
Concern about my finances 13.57%
Concern about my employment 8.14%
*Respondents who answered this question skipped Q3 below

3. If you do plan to buy, where are you looking?
Outside of 416 and 905 53.29%
City of Toronto 15.57%
905 23.18%
416 7.96%

4. What are you planning to buy?
Single-detached home 54.83%
Condominium 21.38%
Townhome 14.14%
Semi-detached home 6.21%
Stacked townhome 3.45%

5. When are you planning to buy?
Not sure, some time in 2021 85.26%
In the next six months 9.47%
In the next three months 5.26%

6. What are the key things you look for when searching for your new home or condo?
Price that suits my budget 84.84%
Greenspace and other natural amenities 51.61%
Proximity to highway access 28.71%
Proximity to transit 28.39%
Work-from-home spaces 30.32%
Other 14.84%

7. How important is price to you when looking to buy a new home or condo?
Important, but not my number one concern 69.06%
It’s everything; this is my first purchase 26.71%
Not very important, as I am ‘moving up’ 2.62%
Not important at all 1.63%

8. How is COVID-19 affecting your plans?
I am making doubly sure my finances are sound and my employment secure 39.74%
Not affecting my plans at all 24.04%
I am waiting until the pandemic is fully over 19.55%
I was planning to buy in 2020, but the pandemic delayed my plans 16.67%

9. What safety protocols are most important to you?
Virtual appointments first, then a site visit 49.03%
I am willing to visit sales centres by appointment only 44.19%
I am comfortable buying completely virtually 6.77%

10. How is COVID-19 changing what you look for in a home?
Not affecting my wish-list of inclusions at all 57.88%
I want smart work-from-home spaces and the latest home tech 25.08%
I am looking for a larger home with more space 17.04%

11. If COVID is affecting your plans, will you:
Buy a smaller lowrise home (ie. townhome or semi vs single-detached)? 51.04%
Buy a condo (mid- or highrise) instead of a lowrise home? 28.22%
Buy with a friend or relative to ensure affordability? 20.75%

12. How concerned are you about new home affordability?
Very 51.46%
Somewhat 38.19%
Not very 5.50%
Not at all 4.85%

13. Do you plan to get mortgage pre-approval?
Yes 52.90%
Not sure 28.71%
No 18.39%

14. Where do you plan to secure a mortgage?
Bank 40.98%
Not sure 36.72%
Mortgage broker 22.30%

15. What are you expecting from new home and condo builders in these unprecedented times?
Offer pricing discounts and other incentives 58.22%
Offer free upgrades and other incentives 23.68%
Offer pricing discounts 15.13%
Other 2.96%

16. If new home and condo builders don’t offer pricing discounts and other incentives:
I’ll buy resale instead 45.57%
Supply is low, I’ll buy what I am happy with 28.52%
I’ll buy only from those that do 25.90%

What the experts are saying

For additional insights, we went to some industry experts, though not specifically on survey results

The latest lockdown should be similar to what happened in the spring, when sales took a pause and then restarted once things began reopening. Though this time, we are seeing end-users actively go through the decision-making process right now.

We have made our information, such as current pricelist, floorplans and brochures, much more readily available and can easily be downloaded from our website. There’s also a search function that may help buyers narrow what you’re looking for.
Our advice to prospective homebuyers is to really take a close look at layouts, as they need to suit your lifestyle today and what you had a year ago to maintain the flexibility you ultimately want in your purchase.

Anson Kwok
Vice-President, Sales and Marketing
Pinnacle International

During this second lockdown and approaching the end of the year, it reminds us once again of the severity of the COVID situation. Despite this, there is great optimism as we get ready to head into 2021. A vaccine is coming and we expect life to return to more normal by the middle of next year.

What does this mean for people looking for condos to buy today? Now is the time to buy!

Brian Brown
Prinicpal
Lifetime Developments

It’s business as usual for us – with strict COVID-19 protocols in place. We are in the middle of two brand new launches and have exceeded our projected sales numbers. Both Dylan Condos by Chestnut Hill Developments (located on the Glencairn subway stop), and The Villages of Highland Creek semis and townhomes by Your Home Developments are set up to accommodate selling virtually. We have been conducting approximately 50 per cent of the sales online and the balance in person by private appointment.

Both builders were prepared for the pandemic market with what we call “PPM” – pandemic proof measures – to help facilitate sales.

In2ition has launched more than a dozen communities during the pandemic, with exceptionally strong sales for both highrise and lowrise product.

This is a rare opportunity for homebuyers to jump into a market with great offerings of historical low interest rates as low as 1.65 per cent, and some excellent incentives being offered by developers. You want to buy your new home or investment property today – prior to the 450,000 projected immigrants entering the country, which will create even more pressure on supply and pricing.

Debbie Cosic
CEO & Founder
In2ition Realty

The recent lockdown won’t affect sales because we have adopted new technology to run a virtual sales office since the first lockdown.

Flato has put a lot of effort into building our name and brand in the communities we build. Now they mean more to homeowners on the home purchase journey. By providing services online, we are able to sell homes while keeping customers safe.

We suggest homebuyers use digital tools for their new home purchases and to help them stay safe during COVID-19.

Shakir Rehmatullah
President
Flato Developments

Our industry is fuelled by purchasers visiting our sales offices, learning about the location, floorplans, and conversing with our sales teams about special features of the homes. At CountryWide Homes, we have made the innovative decision to provide full transparency of our homebuying experience online. Understanding many buyers are now educating themselves at home online, we’ve created a virtual sales experience powered by SaleFish consisting of virtual appointments, online pricing and complete virtual walkthrough tours of our model homes. The icing on the cake was to provide a completely safe, comfortable and touchless experience, by allowing the purchasers to sign the agreement of purchase and sale digitally while being in the comfort of their own home.

The reality is, people are doing more pre-purchase research and self-educating online today more than ever. The homebuilding industry has been lagging behind this concept for too long. The pandemic has forced many industries to become more tech-savvy with online sales platforms, which also made us more environmentally friendly; by going digital, we’ve saved tons of paperwork. In the end, buyers get a better user experience and the builder saves countless hours while reducing paper processing.

Richard Mariani
Manager, Sales and Marketing
CountryWide Homes

We recognize that it’s not business as usual. Purchasers are more selective and sensitive to the market than ever before. With this latest lockdown, we’ve put an emphasis on finding meaningful ways to connect with our buyers and the realtor community by adapting technologies and putting greater focus on being creative, approachable and relatable.

For our prospective clients, we remind them that while it’s challenging right now, we will overcome this. Toronto is one of the greatest cities in North America, we believe in the future of the city and the real estate market. We expect prospective homebuyers to enter 2021 with a fresh, new perspective and more confidence in the real estate market.

Jason Lam
Vice-President, Sales and Marketing
CentreCourt

Early this year, Cortel Group was getting ready to launch Tower 1 of our Abeja District project. We expected to have thousands of people walk through our brand-new presentation centre located at Jane and Rutherford in Vaughan. With the unprecedented rise of COVID, it felt like everything changed overnight. We knew we would have to pivot in a big way if we wanted to launch the project.

We have been using a residential real estate sales software, SaleFish, for our highrise projects since 2010. We saw an opportunity to move ahead with the Abeja launch in a different way. We were able to create an environment where we could efficiently make a sale while keeping our purchasers safe from any COVID risks. The platform allows us to make digital sales off- or on-site, maintaining physical distance. We proceeded with the launch of Tower 1, and it sold out immediately. The speed and efficiency of the system allowed us to successfully launch and sell out Tower 2 and we are now well into the sales program of Tower 3, making Abeja District one of the most successful project launches of 2020.

Peter Cortellucci
Vice-President
Cortel Group

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