Many would-be homebuyers in Canada’s hottest urban markets are rushing in to buy homes without knowing whether their finances can handle it, a new survey suggests.
Nearly one in five respondents in the survey from TD Canada Trust showed signs of “FOMO,” or “fear of missing out” on the large price gains seen particularly in Greater Vancouver and Greater Toronto.
Twenty per cent said they were worried they rushed the buying process in order to secure a home, while 13 per cent said they rushed out of fear they would get priced out of the market.
Those fears could be creating a feedback loop for house prices, with home buyers rushing in ahead of further price hikes, thus putting more demand on the market and creating more upward price pressure.
That could help to explain why home sales in Toronto and Vancouver hit record highs this year, with sales up 27.4 per cent in Vancouver in March, and up 16.2 per cent in Toronto.