Canadians surveyed in a new poll appear to be conflicted about whether to buy a home this year, with a majority believing now is the right time to buy but more than 70 per cent saying they are unlikely to do so.
The Royal Bank’s annual home ownership survey found 59 per cent of respondents believe now is the time to get into the housing market, instead of waiting until next year.
That’s four percentage points higher than in last year’s poll.
But 73 per cent said they are unlikely to buy within the next two years, up two percentage points from last year.
The poll was done in late January, about the time Prime Minister Stephen Harper first indicated his government’s intention to reform Canada’s retirement system. There was also widespread concern about the Greek debt crisis at the time.
“I would say that people are pretty conflicted around home buying intentions,” said Marcia Moffat, head of home equity financing for RBC.
“Consumer sentiment is not all pointing in the same direction,” she said.
However, confidence in home ownership is on the rise, she added.
About 88 per cent said they believed a home is a good investment, up two percentage points from last year and 68 per cent said they thought the value of their home has risen in the past two years.
Most of the 2,006 Canadians surveyed also said they expect home prices to remain stable next year, in line with economist consensus.
“Where the mix of opinions comes in is as to whether or not it makes sense to buy a home right now.”
“I think consumers recognize that mortgage rates are at historic lows so that would factor into people thinking that it makes sense to buy now
“Some may have already recently bought and may not be in the market for another home, or maybe the available supply is not there in their community, or what they think is affordable and appealing to them.”
After four years of sentiment leaning toward the belief the market is tilted toward buyers, there was an increase this year to 27 per cent of respondents who felt the market is in sellers’ hands. That’s up from 20 per cent in 2011.
Still, nearly four-in-ten of those surveyed said they believed it is still a buyers market, in which the number of homes available exceeds the number of buyers.
Meanwhile, three-quarters of survey respondents said they feel they are well-positioned to weather a potential downturn in home prices.
The Bank of Canada and some economists have warned that Canadians are piling on too much mortgage debt while interest rates are low, and some may no longer be able to afford their homes when interest rates rise.
One paper issued by the central bank suggested that home prices have been influenced not only by low mortgage rates but also on expectations that values will keep rising.
In RBC’s poll, less than half of respondents felt that housing prices will be higher this time next year, while 46 per cent said they expect mortgage rates to stay the same.
“There’s a mix of opinions on the housing market, as Canadians still feel confident about real estate but are a little uncertain about where the market is heading and when it makes sense to buy,” said Moffat.
The survey findings come as some of Canada’s biggest banks begin raising variable mortgage rates, even though the Bank of Canada’s overnight interest rate remains unchanged.
That could signal the end of the era of cheap borrowing that has encouraged many Canadians to take on houses they may not have been able to otherwise afford.
Many economists had expected the housing market to cool off much more than it has in the past year.
Last year, it had been anticipated that the Bank of Canada to begin raising its key interest rate by the middle of 2011 but that didn’t happen, which has also propped up home sales longer than anticipated.
The survey was conducted by Ipsos Reid on behalf of RBC between Jan. 24 and 30. It has an estimated margin of error of plus or minus two percentage points 19 times out of 20.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment