Most Canadians would sacrifice vacations to own home

Most Canadians would give up their vacations if it meant owning a home sooner, according to a new report. The First-Time Homebuyer's Monitor, released Thursday by Genworth Financial Canada, said 68 per cent of Canadians polled were willing to delay major purchases to allow them to buy a house. Once many Canadians own homes, however, they seem open to other options including taking on a second job or foregoing vacations — in order to keep up on mortgage payments.

According to the report, vacation budgets were high on the list of things to cut in order to buy a home. Sacrificing vacations also remained a common solution to adjust to lost income, such as layoffs or reductions in hours.

Fifty-one per cent of the 2,000 people interviewed in September said they would give up vacations if it meant they could own a home sooner. Some 82 per cent of the group, whose results were combined with online research data from May 2009, said they would cut out vacation spending if times got tough.

"Canadian homebuyers know they need to make sacrifices, such as delaying major purchases, giving up vacations or working a second job, until they can afford to purchase a home," Stephen Dupuis, president and CEO of the Building Industry and Land Development Association, said in the report.

"But they are also willing to do the little things, as well, from packing a lunch to foregoing non-essential purchases to simply doing without — whatever it takes to get their foot in the door." Twenty-eight-year-old Michael Carr of Ottawa, who bought a home with his girlfriend this spring in the city's west end, was no exception.

"Our vacations were closer to home," Carr said. "We'd just go to the cottage instead of travelling somewhere else, so we saved a lot of money that way. "We're not withholding anything now. We have a budget and we stick to that, so we're not starving ourselves of anything."

After a four-month search that included viewing many homes, the couple was able to comfortably cushion the increase from rent to mortgage payments, because advance thinking eased the financial burden when their deal closed in July.

"We didn't really have to sacrifice anything," said Carr, who said the only noticeable change was in the couple's clothing budget in the months leading up to their home purchase. "We're both fairly frugal, so we were already saving for it (for a few years), so we had enough for the down payment. Once you have that down payment, the cost isn't that much more (than renting)."

If their financial situation took a turn for the worse, however, Carr was in the same category as many other Canadians facing tougher times. "We'd probably look into renting out a bedroom in the house, or maybe even a second job, depending (on the situation)," Carr said.

Thursday's report, which found younger Canadians were even more willing to make cuts to get into the real estate market, said 65 per cent of respondents would be willing to find a second job, and 44 per cent were open to renting out part of their home, to make ends meet. That option could be a long way away for the Ottawa couple, though, as Carr describes themselves as "very prepared" to make mortgage payments if they experienced a drop in income.

They are among the minority in that area, however, as just 16 per cent of Canadians said they were very prepared to deal with a loss of income. Nearly half of those polled — 49 per cent — said they were "somewhat prepared" to deal with a loss of income by keeping up on mortgage payments, while 35 per cent described themselves as "not very prepared" or "not at all prepared."