Sagen MI Canada Inc · TSX:MIC.PR.A
Sagen MI Canada — Investor Presentation (June 2023)
45 slides from Sagen MI Canada's investor presentation, June 2023
Slide 1: Homeownership Education Week 2023
q a 2023 Homeownership Fducation Week
Slide 2: Methodology
Methodology 2 2023 Homeownership Education Week
Slide 3: Methodology
Methodology ● A total of 2,223 interviews with Canadians aged 25-45 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 22 and March 27, 2023. ● Quotas were set to oversample in urban regions with
Slide 4: Macro Market Shifts
Macro Market Shifts 4 2023 Homeownership Education Week
Slide 5: Fewer today feel there is too little supply of homes available
Fewer today feel there is too little supply of homes available in their areas while more feel there is a normal supply General Population Too much Normal Too little supply supply supply 2023 4% 10% 26% 29% 11% 19% 15% 40% 2022 5% 10% 18% 34% 21% 12% 15% 55% There is an excessive supply of homes avai
Slide 6: Homebuyer confidence declines among General Population; buyers and intenders more confident
While General Population continues to decline in homebuyer confidence, buyers and intenders remain much more confident General Population First-Time Buyers and Intenders (2023) A good time to buy A bad time to buy A good time to buy A bad time to buy First-Time 2023 2%11% 24% 28% 22% 13% 14% 30% 26%
Slide 7: Forward intentions to purchase a home decline to all-time lows
Forward intentions to purchase a home decline to all-time lows among both current owners and non-owners General Population Current Owners Selling & Buying New Non-Owners Buying a New Home 18% 19% 18% 22% 19% 17% 19% 19% 16% 14% 17% 14% 15% 12% 10% 15% 13% 7% 8% 12% 8% 11% 8% 7% 7% 8% 7% 6% 5% 7% 6%
Slide 8: Homeownership for 25-40 market reaches all-time lows
Homeownership for the traditional 25-40 market reaches all-time lows; Millennial homeownership rates stall General Population Home ownership: 25-40 year-olds Home ownership: Millennials 70% 70% 71% 60% 64% 62% 60% 63% 61% 62% 60% 58% 60% 50% 50% 55% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2015 2017 20
Slide 9: Delayed and discouraged buyers among those not buying
Among those not buying in the past 24 months or next 24 months, 10 percent each have either delayed purchase intentions or feel they can no longer afford to buy Yes, I had expected to buy a home in that timeframe but will have to wait a few more 10% Delayed buyers years to be able to afford to Yes,
Slide 10: Proportion of First-Time Buyers purchasing recently declines substantially
The proportion of First-Time Buyers purchasing more recently declines substantially; the proportion of First-Time Intenders planning to buy more than a year from now increases slightly First-Time Buyers First-Time Intenders 37% 37% 26% 2023 8% 25% 67% P12M: 63% N12M: 33% 24% 23% 53% 2021 13% 25% 63%
Slide 11: Who are FTBs and FTIs today and what are they buying?
Who are FTBs and FTIs today and what are they buying? 11 2023 Homeownership Education Week
Slide 12: Youngest and lower income first-time buyers getting squeezed out
The youngest first-time buyers and lower income first-time buyers are gradually getting squeezed out of first-time homeownership Age Distribution Household Income Distribution 100% 100% 9% 90% 23% 90% 36% 31% 36% 37% 31% 33% 37% 80% 80% 40% 34% 48% 48% 70% 70% 60% 60% 41% 25% 26% 50% 36% 50% 26% 25%
Slide 13: Small increase in First-Time Buyers buying with spouse/partner
Small increase in proportion of First-Time Buyers buying with spouse/partner First-Time Buyers First-Time Intenders 64% 63% With a spouse/partner 60% With a spouse/partner 62% 57% 34% 35% By yourself 38% By yourself 37% 41% 2% 2% 2023 With someone else 2% With someone else 2% 2021 2% 2019 FTB: Did y
Slide 14: Earlier shift to condos from detached homes maintained
Earlier shift to condos from detached homes maintained among buyers and grows among Intenders First-Time Buyers First-Time Intenders Two thirds buy with spouse/partner 46% 47% 46% 53% Fully detached home 50% Fully detached 54% home 55% 24% 24% 23% 19% Condominium 21% Condominium 16% Half buy 17% alo
Slide 15: Price, space and value as an investment rank highest
While price, space and value as an investment rank highest, significant increases over 2021-pandemic- driven scores for proximity, and energy efficiency. Increased desire for space to work from home. First-Time Buyers First-Time Intenders 95% 97% Price 92% Price 97% 95% Its value as an investment/ta
Slide 16: Buyers and Intenders shift back to buying closer to work
Both First-Time Buyers and Intenders start to shift back to buying a home closer to work that is smaller or more expensive First-Time Buyers First-Time Intenders A: Prefer closer to work, B: Prefer further from A: Prefer closer to work, B: Prefer further from smaller or more work, less expensive sma
Slide 17: Home Price and Mortgages
Home Price and Mortgages 17 2023 Homeownership Education Week
Slide 18: Increasing prices and faster rising down payments
Increasing prices for purchasers and intenders with faster rising down payments among buyers; declining incidence of high ratio mortgages First-Time Buyers First-Time Intenders $538 +19% $540 +13% $480 $452 Total Prices Paid $402 $406 $318 $411 +14% <6M 6-12M $434 +13% By time of 12-24M 6-12M < 6M f
Slide 19: Buyers of $750k+ homes prefer 30-year amortizations with high ratio mortgages
Recent buyers and intenders of $750k+ homes are more likely to have wanted 30-year amortizations with high ratio mortgages First Time Buyers First-Time Intenders 2023 28% 35% 15% 10% 13% 2023 23% 34% 19% 15% 9% 63% 24% 57% 35% 2021 14% 38% 22% 16% 10% 2021 20% 31% 18% 22% 10% 52% 38% 51% 40% Very li
Slide 20: Growing worry about missing out on a house due to down payment
Growing proportion of those who were worried about missing out on a house they really wanted because of the down payment First Time Buyers First-Time Intenders 2023 27% 41% 22% 10% 2023 27% 37% 23% 11% 67% 31% 63% 35% 2021 23% 39% 24% 12% 2021 23% 37% 23% 14% 62% 36% 60% 37% 2019 20% 36% 26% 16% 56%
Slide 21: Economic conditions lead to smaller homes or more affordable areas
More than a quarter of First-Time buyers bought before interest rates rose. One third each say economic conditions led them to buy smaller homes or homes in more affordable areas than planned; Intenders show similar interest in finding affordability solutions I purchased/will purchase a smaller 32%
Slide 22: Six in 10 received financial support from families
Six in 10 received financial support from their families. For many, financial assistance is a gift, for others it is a loan to be repaid Financial assistance in a lump 35% 46% I received/will receive financial sum payment (e.g. for your 31% assistance as a gift 38% down payment) Financial assistance
Slide 23: Buyers would make a smaller down payment without a gift/loan
More buyers and intenders say they would have bought/will buy a home but would have made/will make a smaller down payment if they didn’t/don’t receive a gift/loan First Time Buyers First Time Intenders 44% 46% I would delay buying a home I will delay buying a home until I until I had saved up a larg
Slide 24: Mortgages
Mortgages 24 2023 Homeownership Education Week
Slide 25: Increased importance of individual sources of mortgage information
Buyers and intenders report increased importance of each individual source of mortgage information, notably bank reps, financial advisors and builders/developers First-Time Buyers First-Time Intenders Individual Sources: 80% 84% Net Important Mortgage broker/specialist 78% Mortgage broker/specialist
Slide 26: Other sources of mortgage information increase in importance
Other sources of mortgage information increase in importance as well, including mobile tools, web content, home shows, social media and traditional media First-Time Buyers First-Time Intenders Other Sources: 66% +6% 74% +8% Net Important Mobile Tools (for example Apps, Mobile Tools (for example Apps
Slide 27: Recent Buyers shift back to mortgage specialists from brokers
Recent Buyers shift back to mortgage specialists from mortgage brokers First-Time Buyers First-Time Intenders 70% 62% Mortgage specialist at a Mortgage specialist at a 62% 59% bank or credit union bank or credit union 68% 26% 26% An independent An independent 33% 30% mortgage broker mortgage broker
Slide 28: Shift among those with independent brokers obtaining mortgage from main institution
Small shift in proportion of those working with an independent mortgage broker who obtained their mortgage from their primary financial institution 44% Mort. Spec. Indep. Mort. Same lender as 42% 2023 FTHB Total at bank/ CU Broker main Financial 45% Same as Main FI 44% 52% 25% Institution 45% 48% Di
Slide 29: More anticipate renewing with current provider than in 2021
More now anticipate renewing with their current provider than in 2021; those working with mortgage brokers and with a mortgage from a different financial institution than their main one are more likely to seek a different provider 45% Renew with your current 41% mortgage provider 55% Mortgage Source
Slide 30: Better rates and convenience top reasons for renewing
Better rates and convenience are the top reason FTBs will renew with current provider; better rates and better flexibility/payment options are top reasons FTBs will seek a new lender Reasons for renewing with current lender Reasons for not renewing with current lender If I get better interest rates
Slide 31: Financial Fitness
Financial Fitness 31 2023 Homeownership Education Week
Slide 32: First-time Buyers outpace all Canadians on Financial Fitness
First-time Buyers consistently outpace all Canadians on Financial Fitness; but decline in 2023 as intenders are flat and Canadians as a whole decline First-time buyers 115 113.5 110 111.7 110.8 109.5 107.6 105 General population 102.8 102.2 First-time 102.1 102.3 102.5 102.2 intenders 100 101.3 100.
Slide 33: Buyers shift from Looking Great/Good to Managing and Vulnerable
Buyers: shift from Looking Great/Looking Good to Managing and Vulnerable, Intenders move little; General Population shift to Vulnerable First-Time Buyers Intenders General Population 14% - 7% 9% 18% 21% 9% 21% Looking Looking Looking 14% 18% 17% Great 18% Great Great 20% 17% 14% 25% - 5% 23% 21% 30%
Slide 34: First-Time Buyers see reduction in ability to pay bills and save
First-Time Buyers see reduction in ability to pay bills and save; First-Time Intenders see no changes First-Time Buyers First-Time Intenders 43% 54% 53% Able to pay all your 55% Able to pay all your bills & 53% bills & save some save some money 53% money 50% 38% 30% 33% Managed to pay all of 30% Man
Slide 35: More First-Time Buyers feel financial situation has gotten worse
First-Time Intenders change little; highest proportion of First-Time Buyers who feel their financial situation has gotten worse in the past year… First-Time Buyers First-Time Intenders 31% 44% 39% 41% Improved 44% Improved 42% 43% 48% 40% 47% 43% Stayed the same 47% Stayed the same 49% 47% 20% 14% 1
Slide 36: Almost half of buyers expect financial situation to improve
…but almost half of buyers continue to expect their financial situation will improve in the coming year, as do two-thirds of intenders First-Time Buyers First-Time Intenders 46% 65% Improve Improve 46% 56% 43% 26% Stay the same Stay the same 44% 34% 8% 5% Get worse 2023 Get worse 2023 7% 2021 6% 202
Slide 37: Longer-term confidence remains high; concern about making ends meet rises
Longer-term confidence remains high, first-time buyers and intenders both see an increase in concern about making ends meet month to month First-Time Buyers First-Time Intenders 81% 81% I have a lot of confidence 86% I have a lot of confidence 79% in my long term financial 83% in my long term financ
Slide 38: Buyers more concerned about interest rate increases impacting mortgage payments
First-Time Buyers now more concerned about further interest rate increases impacting their ability to pay their mortgage than job loss or other risks 78% +15% 63% Interest rates were to rise 68% 67% 60% 75% 73% You/your spouse/partner were to lose their job 74% 73% 74% 65% +11% 54% You faced an unex
Slide 39: Fewer First-Time Buyers delay or suspend mortgage payments
Despite rising interest rates, fewer First-Time Buyers report delaying or suspending mortgage payments, and report no change in paying other bills 2023 17% Delay or suspend 2021 23% your mortgage 2019 15% payments 2017 12% 2015 9% 2023 16% Delay or default on any other bill 2021 17% payments 2019 15
Slide 40: Double up and lump-sum mortgage payment behaviours
First-Time Buyers have not changed their behaviours in making double up payments; however, they are less likely to have made larger, once a year, lump sum payments and are less certain about doing both in the coming year Past year Coming year 2023 32% 2023 34% 2021 33% Double-up, or 2021 39% increas
Slide 41: Impact of economic conditions on decision to buy
Most First-Time Buyers say economic conditions would not have impacted decision to buy; Four-in-ten intenders say conditions have caused them to delay the timing of buying a home 26% They have had no impact on my ability to afford my home/afford a home 14% They have been challenging, but I would not
Slide 42: Tying it all together
Tying it all together 42 2023 Homeownership Education Week
Slide 43: Key Takeaways
Key Takeaways 1 Tight supply, high prices and economic uncertainty have curtailed recent first-time buying activity to lowest levels to date, and are keeping intenders on the sidelines longer. The profile of the first-time buyer continues to evolve, with 2 younger, less affluent buyers being left ou
Slide 44: Key Takeaways
Key Takeaways 5 Home prices grow, down payments surge faster among buyers, as only the highest qualified buyers can buy. Affordability supports needed as six-in-ten receive financial 6 assistance from relatives. Six-in-ten say 30-year amortizations with high ratio mortgages would have been preferred
Slide 45: Thank You
Thank You Environics Research 366 Adelaide Street West, Suite 101 Toronto, ON M5V 1R9 Homeownership Education Week 2020 45 45 2023 Homeownership Education Week