Nearly 40 percent of Canadian homeowners said they were concerned about their finances, and less than half said they could afford more than $200 in increased monthly costs, according to the latest BNN Bloomberg and RATESDOTCA survey.
The survey, conducted by Leger, asked 1,513 Canadians about their financial conditions as they face rising interest rates and the highest inflation in more than 30 years. The survey focused on homeowners, with 62 percent of respondents saying they own their home. Lager conducted the survey between May 13 and May 15, 2022.
Homeowners, especially those who bought before the pandemic, have enjoyed huge equity gains in the past decade. The median home price in Canada hit a record $816,720 in February, according to the Canadian Real Estate Association. While prices have fallen slightly since then, that’s nearly double the median home price of $468,350 just three years ago, in February 2019.
The survey found that 39 percent of Canadian homeowners are concerned about their finances, including 18 percent who said they are very concerned. Among the respondents concerned, half said they had purchased their home in the past two years.
Age tended to play a large role when it came to worries about finances. Those over 55 were the least likely to worry about their finances, with 32 percent of that group either anxious or very anxious. Those aged 35-54 were the most anxious, including 23 percent of that age group who said they were very concerned about their finances, and nearly half of the group showed some level of anxiety (47 percent).
Those 18-34 fell in the middle of the pack, with 39 percent expressing some concern about their finances.
The survey found that 61 percent of Canadian homeowners said they weren’t worried about their finances at all, indicating that nearly two out of three Canadians think they are in good financial shape. There are likely multiple reasons for this. First, unemployment in the country is approaching a record low after the Canadian economy recovered from the 2020 recession caused by COVID-19 lockdowns.
Older Canadians have also benefited from higher house and stock prices in the past couple of years, which has likely boosted their confidence as a result.
The survey found that Canadian homeowners don’t have much room to rest. 74 percent of those surveyed said they could comfortably afford up to $200 in increased monthly costs; After that, trouble appears.
Only 45 percent said they could afford increased monthly costs of between $201 and $500, while 19 percent said they could afford $501 to $1,000. Nine percent said they could afford an increase of $1,000 or more in monthly costs.
The survey also found that many Canadian homeowners cannot save more than five percent of their monthly income. Most experts recommend targeting 10 percent or more to help save for retirement (it’s worth noting, though, that everyone’s financial needs are different, and the 10 percent guideline doesn’t apply to everyone).
73 percent of Canadian homeowners said they could save up to five percent of their monthly income, while 49 percent said they could save up to 10 percent of their monthly income. Only 30 percent are able to save 11-15 percent of their monthly income, while 10 percent say they have the ability to save more than 20 percent.
BNN Bloomberg has teamed up with RATESDOTCA to poll Canadians each month on key pocket issues as we strive to better understand how families are dealing with COVID-19. This is the latest premium in the special monthly coverage.