Energy efficiency is a highly prominent factor among people shopping for new homes in Ontario.

According to the 2023 Tarion New Home Buyers Report, 96 per cent of buyers interested in pre-construction and newly built homes rank energy efficiency as being almost equally important as the price, size and design of a home.

The report outlines what is top of mind for buyers based on feedback from an online survey conducted by Environics Research Group between November 21 and December 1, 2022.

Almost six in ten respondents said energy efficiency was the highest deciding factor between choosing a newer home versus an older one built more than five years ago. The majority of respondents who placed the most value on energy efficiency were 45 to 54 years old. They were also more interested in living in semi-detached or detached houses, in the exurbs or within small towns.

“Buyers’ interest in newly built and pre-construction homes is high relative to older homes,” says David MacDonald, Group VP, Financial Services at Environics Research Group who led the survey work. “For many, energy efficiency is a significant motivator. With many Ontarians working from home in an environment of high inflation and energy costs, both environmental and economic factors play into their decision calculus. New homes are associated with the latest building codes, better quality, and fewer problems.”

Based on Tarion’s data, in 2022, 53,704 homeowners officially took on the ownership of newly built freehold homes or condos. In this newest report, 50 per cent of respondents said a new home would give them “the greatest peace of mind,” followed by pre-builds.

Respondents prefer “move-in-ready” abodes with no immediate renovations or maintenance. For pre-builds, people are attracted to the idea of personal customization. The builder’s warranty that comes with new homes also figured as an important factor. In fact, 83 per cent of respondents are aware of it, although some awareness is still lacking that it’s a builder warranty.

Most buyers said they prefer fully detached homes, followed by semi-detached homes and townhomes. Condos figured lowest on the list for 32 per cent. The majority wish to live close to their current residence in the same town or city. Nearly half (49 per cent) aim to move within their current region in Ontario and 21 per cent would move to a different region in the province. Only 5 per cent plan to leave Ontario.

Most buyers (84 per cent) intend to use their new home as a primary residence, while about 58 per cent enjoy the option of renting all or part of their home. Another 15 per cent envision an investment property and 72 per cent value the possibility of working from home.

Who is buying new?

The majority of survey respondents are repeat buyers (mainly baby boomers) compared to one-third who are looking for their first home. Those who have never purchased are more likely to be millennials, single, considering a condo or townhome and newcomers to Canada who arrived in the past decade. Millennials are also more likely to consider pre-construction and homes located in urban areas.

More than one-third of Ontarians who intend to purchase new homes were born outside Canada and have already spent about 17 years in the country since immigrating. This is a stand-out insight of the new homes report, according to MacDonald. “It’s also interesting that, while intenders are a diverse group with many different journeys, the demographic getting into the new homes market is fairly young overall,” he noted.

To access the full report, visit: https://tarion.com/sites/default/files/2023-06/Tarion-New-Home-Buyer-Report.pdf.