Buying a home? Report sheds light on why Ontario’s home shoppers choose new or pre-construction

Every year, thousands of Ontario’s consumers navigate the real estate market in search of a new home – a landscape that’s dynamic and often confusing.

Today’s home shoppers face a number of complexities, like inflation, fluctuating prices and interest rates, or a growing diversity of the sizes and types of homes available. One key decision that defines the homebuying journey early on is whether to focus on the resale market, with homes that already exist in brick and mortar – or to buy directly from a builder, with a floor plan, a showroom visit and some imagination helping you envision your future home.

Buying a pre-construction home can take a leap of faith. After all, you haven’t seen what you are getting. The good news is that, in Ontario, most new homes come with a warranty provided by the builder and supported by Tarion, an independent consumer protection organization. At a time when demand for new housing is soaring around the country, Tarion conducted research to learn more about what drives homebuyers to choose new or pre-construction – and the factors they’re considering along the way.

Tarion’s 2023 New Home Buyers’ Report gives us a detailed picture of who’s buying new homes in Ontario, and why.

Who’s buying new homes in Ontario?

The survey, which focused on Ontarians who plan to buy a new or pre-construction home in the next twelve months, found overall that our population of home shoppers reflects our province’s diversity. One-third (35%) of respondents are first-time buyers, who are more likely to be Millennials (46%), single (54%), and considering a condo (42%) or townhome (43%) for their home purchase. The remaining two-thirds (65%) are repeat buyers, who the survey found are more likely to be Baby Boomers (86%) and either married or in common-law relationships (69%). Additionally, more than one-third (35%) of new home purchase intenders were born outside of Canada. These buyers are well-established in Canada, having lived here an average of 17 years since their immigration.

Why buy a new or pre-construction home?

When asked why they’re considering a pre-construction home or one built within the last five years, respondents indicated that, overall, home buyers value the peace of mind that comes with owning a brand new home.

The majority (84%) of respondents plan to use the home as their primary residence, but, interestingly, six in ten (58%) like having the option to rent all or part of the home. Seven-in-ten (72%) respondents were looking for a home that includes a work-from-home space, which reflects the growing trend toward hybrid workplaces.

When it comes to choosing a home, top factors include the home’s size and space (98%), price (98%) and design (94%). Interestingly, many home shoppers prioritize the energy efficiency of the home (96%) and its appliances (92%). This suggests that today’s buyers either recognize the environmental importance of energy efficiency in an era of climate change – or are sensitive to costs.

The survey also showed that home shoppers are setting themselves up for success as smart consumers: both the building company’s reputation (92%) and the protection provided by the new home warranty (91%) were top factors in choosing a home.

Tips for new home shoppers

When buying pre-construction, finding a home you like and a builder you trust are just the beginning. Taking a few simple but critical steps can help you protect your consumer rights before you sign a purchase agreement:

• Check the Ontario Builder Directory to ensure that you’re buying from a licensed builder.
• If you’re requesting upgrades, confirm all the details in writing with your builder.
• Get a lawyer to help you review the details of your purchase agreement and make sure you understand the terms and conditions and know what happens if the sale is delayed or terminated.
• The builder’s warranty includes deposit protection in case the sale isn’t completed. Find out how much of your deposit is protected through the warranty program.

Be a partner in protecting life’s biggest investment

Last year, more than 50,000 new homes were built in Ontario. That’s enough detached and semi-detached homes, townhomes and condos to make a small town. With so many consumers taking a new construction road to home ownership, it’s more and more important that all new home buyers understand their warranty coverage and know their responsibilities in maintaining their home once they move in. At Tarion, we’re here to help with easy tips, tools and resources at Tarion.com.

If the sight of construction cranes in the city skyline has you seriously thinking about owning a condo with a view, or your Sunday drive past a new development has you calculating a new commute time, do yourself a favour: learn about the builder’s warranty for new homes and how it protects you.