Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Investor Presentation (May 2021)
39 slides from Sagen MI Canada's investor presentation, May 2021
Slide 1: 2021 First-Time Homebuyer Survey & Financial Fitness Study
) ) ) oO oO oO oO 2021 First-Time Homebuyer Survey & Financial: : Fitness Study | e SAGEN" C Bl ‘ > S Ws U 0000 ome ome) AN000 NN 11110011 ROYAL LEPAGE SN 1111001001011 J
Slide 2: Methodology
Methodology ● A total of 1,856 interviews with Canadians aged 25-40 who had either purchased their first home within the prior two years or plan to in the next two years. ● Online interviewing was completed between February 17 and March 16, 2021. ● Quotas were set to oversample in urban regions with
Slide 3: The Big Picture
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE ROYAL LEPAGE UTTTTTTLTTTLTTLTI
Slide 4: Incidence of first-time homeownership
Incidence of first-time homeownership 2019: Where are the missing First-Time Buyers? 2021: Many are starting to return 11% 8% 9% 6% 5% 2015 2017 2019 2021 FTB 2021 FTI Homeownership Education Week 2020 FTHB Study screening question 4 2021 First-Time Homebuyer Survey & Financial Fitness Study
Slide 5: Homeownership for Millennials rises as they age out of the 25-40 range
Homeownership for Millennials rises as they age out of the 25-40 year range Home ownership: 25-40 year-olds Home ownership: Millennials 70% 70% 60% 71% 60% 64% 62% 61% 63% 50% 50% 58% 60% 55% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2015 2017 2019 2021 2015 2017 2019 2021 Gen Pop Study 5 2021 First-Tim
Slide 6: Half of Buyers bought during COVID-19, Intenders have longer horizons
Half of Buyers bought during COVID-19, Intenders have longer horizons Recent Buyers Intenders In the past year, during Within the next 6 COVID-19 53% months 13% In the past year, prior to Within the next 12 COVID-19 23% months 25% Within the next 24 Between 1-2 years ago 24% months 63% FTB: Did you
Slide 7: Steps taken by intenders
Steps taken by intenders Looked at home listings online 85% Used online home and mortgage tools to estimate what you can afford 69% Learned about mortgage features 56% Found a real estate agent to work with 32% Visited homes to see if they would meet your needs 30% Spoken to a mortgage specialist at
Slide 8: Home Purchase Motivations
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE ROYAL LEPAGE UTTTTTTLTTTLTTLTI
Slide 9: Intenders more likely than recent buyers to want to own a home
Intenders are more likely than recent buyers to want to own a home, so they are in control of it Believe owning a home is a wiser financial 50% decision 48% 49% +5% Saved enough for a down payment 33% Wanting to own the home so you are in 47% control of it 52% Became financially confident that I cou
Slide 10: Buyers and intenders expect significantly higher home prices
Buyers and especially intenders expect significantly higher home prices to come 2021 FTI 74% 12% 6% 8% 2021 FTB 68% 8% 6% 18% 2019 62% 18% 7% 12% 2017 63% 19% 6% 12% Increase Stay same Decrease Don't know By how much do you expect housing prices in your neighbourhood will go up or down in the next 1
Slide 11: Homebuying confidence among all Canadians remains lower than in 2020
Homebuying confidence among all Canadians remains lower than in 2020 A good time to buy A bad time to buy 2021 25% 28% 37% 10% 2020 May 2020 May 33% 28% 30% 10% 2020 Feb/Mar. 8% 30% 34% 18% 5%5% 2020 Feb/Mar. 38% 34% 23% 5% Very good Somewhat good Neither good/bad Somewhat bad Very badtime to buy A
Slide 12: Criteria for choosing home
Criteria for choosing home Price 92% 97% Safe neighbourhood 90% 92% Size/space of the home 89% 91% Having a yard or private outdoor space 80% 85% Style/design of home 80% 84% Its value as an investment/take advantage of 79% rising real estate prices 78% Reflective of type of neighbourhood you want 7
Slide 13: Starter vs. permanent homes
Starter vs. permanent homes 48% A starter home 38% Your permanent home that 25% you plan to renovate and stay in 28% Your permanent home that 17% needs no renovation 24% A fixer-upper that you plan to 5% renovate and sell 3% An investment property/rental 3% that you do not intend to live in First-ti
Slide 14: Intenders favour fully detached homes more than recent buyers
Intenders favour fully detached homes more than recent buyers 46% -4%, -9% since 2015 Fully detached home 53% 23% +2% Condominium 19% 19% +3% Townhouse/ Rowhouse 14% 11% Duplex/Semi-detached First-time buyers home 12% First-time Intenders FTB: What kind of home did you purchase? FTI: What kind of ho
Slide 15: Home Price and Mortgages
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE ROYAL LEPAGE UTTTTTTLTTTLTTLTI
Slide 16: Increasing prices, down payments rising faster
Increasing prices down payments rising faster $385 $360 $326 $323 $260 ($000s) Mortgage Down Payment $76 $83 $92 $96 $59 2015 2017 2019 2021 FTHB 2021 FTHI Proportion of high ratio mortgages 63% 63% 58% 54% 58% Van- FTHBs Calgary Toronto Montreal couver Avg. home price $662 $421 $693 $373 Avg. down
Slide 17: Personal savings are primary sources of down payments
Personal savings are primary sources of down payments, gifts and loans from family help many Your own / partner’s savings/non- 65% registered investments 77% Withdrawal from an RRSP 36% 36% Withdrawal from a TFSA 33% 40% Gift from a family member 23% 17% 11% Net gifts: Loan from a family member Buye
Slide 18: Gifts/loans and low rent result in higher prices and down payments
Gifts/loans and living at home with low rent result in higher home prices and higher down payments 34% Both 2021 Low/ 2019 Gifts gifts & Either Neither FTB no rent low rent Received gifts, loans 37% from family Mean $406 $452 $493 $484 $528 $484 $422 Price paid for your home Median $350 $405 ` $450
Slide 19: Mortgages
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE UTTTTTTLTTTLTTLTI ROYAL LEPAGE
Slide 20: Intenders anticipate accessing more sources, particularly professionals
Intenders anticipate accessing more sources, particularly professionals Mortgage broker/specialist 78% 81% 72% Family/friends 72% Real estate agent 69% 73% Bank/credit union representative 63% 71% Mobile Tools (for example Apps, online 60% calculators, etc.) 66% Internet (lending institution) 60% 66
Slide 21: Mortgage sources used
Mortgage sources used 62% vs. 68% in 2019 Mortgage specialist at a bank or credit union 59% 33% vs. 29% in 2019 An independent mortgage broker 30% 4% Don't know First-time buyers 11% First-time intenders Which of the following did you work with or do you expect to work with to obtain your mortgage f
Slide 22: Different motivations for choosing mortgage specialist vs. broker
Buyers have different motivations for choosing a mortgage specialist vs. a mortgage broker 61% It is my main financial institution 42% The interest rate offered 54% 21% Recommended by family/friends 43% Expertise/knowledgeability of the mortgage 34% lender 54% I have other financial products with th
Slide 23: Intenders favour mortgage flexibility more than buyers
Intenders favour mortgage flexibility more than buyers 86% Available fixed or variable interest rates 87% Payment flexibility or prepayments 82% allowed 84% 78% Available open or closed mortgages 79% 67% Longer or shorter amortization periods 73% 65% Access to home equity 69% 57% Cashback 60% 49% En
Slide 24: Rising proportion using a different lender than main FI
Rising proportion of those who used a different lender than their main FI 42% Mort. Spec. Indep. Mort. Same lender as 45% 2021 FTHB Total at bank/ CU Broker main Financial Same as Main FI 42% 53% 22% Institution 45% Different FI 55% 45% 75% Don't know 3% 2% 3% 48% Mort. Spec. Indep. Mort. 2019 FTHB
Slide 25: Significant drop in proportion renewing with current provider
Significant drop in the proportion renewing with their current provider 41% Renew with your current 55% mortgage provider 57% 53% 43% Seek a different mortgage 20% Top reason for switching: provider 19% 52% 21% If I find a better 46% rate 36% 6% You will not need to renew as 7% your mortgage will be
Slide 26: Financial Context and Financial Fitness
Financial Context and Financial Fitness
Slide 27: Buyers and intenders both able to pay bills and save
Buyers and intenders both able to pay bills and save 53% Able to pay all your bills & save some money 55% 33% Managed to pay all of your bills/savings did not grow 30% 8% Had to draw on your savings to pay all of your bills 8% 3% Had to borrow money to get by First-time buyers 3% First-time intender
Slide 28: Buyers and intenders more optimistic that the future will improve
Buyers and intenders are both more optimistic that the future will improve Financial situation past 12 months Financial situation next 12 months 39% 46% Improved Improve 41% 56% 47% 44% Stayed the same Stay the same 43% 34% 12% 7% Gotten worse Get worse First-time buyers 14% 6% First-time buyers Fir
Slide 29: Proportion doubling up or increasing mortgage payments continues to grow
The proportion of those who have doubled- up or increased their mortgage payments continues to grow Past year 2021 33% 62% 5% Double-up, or increase the amount 2019 31% 66% 3% of your bi-weekly/ monthly mortgage 2017 27% 69% 4% payments 2015 24% 72% 4% 2021 32% 64% 4% Make a larger, once 2019 32% 65
Slide 30: First-time buyers consistently outpace all Canadians on Financial Fitness
First-time buyers consistently outpace all Canadians on Financial Fitness First-time buyers 115 113.5 111.7 110 110.8 109.5 105 General population 102.8 102.3 102.5 102.2 100 101.3 100 100.6 First-time 98.9 99.5 98.5 intenders 97.7 95 96.5 93.9 90 85 Homeownership 2011 2012 2013 2014 2015 2016 2017
Slide 31: Impact of COVID-19
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE ROYAL LEPAGE UTTTTTTLTTTLTTLTI
Slide 32: Buyers and intenders saw less employment impact than gen pop
Buyers and intenders saw less impact employment than gen pop 71% 67% Net: serious impact 63% First-Time Buyers 10% First-Time Intenders 12% Gen Pop. 2021 13% 46% Gen Pop. 2020 – May 33% 27% 19% 20% 21% 21% 9% 8% 6% 4% 4% 5% 5% No impact, I continue to work as A minor impact. My work hours A serious
Slide 33: One quarter of buyers took advantage of mortgage deferrals
One quarter of buyers took advantage of mortgage deferrals, many now repaying Yes, I applied for a mortgage 14% deferral, but have already resumed payment 8% Net: Yes 25% FTHBs 12% Gen Pop Yes, I applied for a mortgage 11% deferral, and will have to resume payment soon 4% 70% No, I did not need to a
Slide 34: Nearly four in ten Canadians saw savings increase during pandemic
Nearly four in ten Canadians saw savings increase during the pandemic Savings increased because working from home and/or reduced spending 23% opportunities meant my monthly expenses were lower Net increased: 38% Savings increased because I reduced my spending to protect against future 19% employment
Slide 35: Four in ten who saw savings rise plan home related expenditures
Four in ten who saw savings rise plan to make home related expenditures Take a major vacation when travel becomes 32% available Contribute to your investments (e.g. RRSPs / 30% TFSAs, etc.) Increase spending on entertainment (e.g. local 22% tourism, travel, hospitality, restaurants, etc.) Make home
Slide 36: Conclusions
L lu O < Vp) ome) foe) fe) O00 oe) TUTTLE UTTTTTTLTTTLTTLTI ROYAL LEPAGE
Slide 37: Conclusions
Conclusions First-time buyers have started to return, and the 1 incidence of intenders is even higher. Financial Fitness of first-time buyers continues to pace 2 well ahead. 3 Average prices advance, down payment rise, high ratio mortgage slip 4 COVID-19 impacts on buyers and intenders varies Homeow
Slide 38: Conclusions
Conclusions 5 Impacts on independent mortgage brokers 6 Mortgage deferrals are up and repayments have resumed 7 Higher home prices are expected 8 Intenders value detached, permanent homes 9 Energy efficiency and proximity are key considerations 2021 First-Time Homebuyer Survey & Financial Fitness St
Slide 39: Thank You
Thank You Environics Research Group 33 Bloor Street East, Suite 900 Toronto, ON M4W 3H1 Homeownership Education Week 2020 39