Confidence in Housing Market High in Most Areas
The housing market is cooling and things aren’t going to get any better until at least the end of this year, market analysts and experts would have you believe. But if their message is to hold off on entering the market, Canadians aren’t listening. According to the most recent Housing Confidence Report released by BMO, nearly half of Canadians – 48 per cent – intend to buy within the next five years. That’s largely unchanged from the amount of Canucks that were considering buying last year, signalling that there’s still much confidence in the Canadian housing market.
What those bearish analysts might find most surprising about the results is that housing confidence and intent to buy in the two most “troublesome” cities – Toronto and Vancouver – hasn’t changed much from last year. In Vancouver 58 per cent of people this year said they had plans to buy; while last year 53 per cent said they were in a position to purchase. In Toronto the differences get even smaller, with 59 per cent saying last year they were going to buy, and falling to just 57 per cent this year.
In Atlantic Canada, 15 per cent more people are considering purchasing a home this year than they were in 2012.
The region to see the biggest drop in buying expectations was surprisingly Calgary, a city that’s thought to have one of the hottest markets right now – and maybe that’s just the problem. Residents here say that housing prices are simply too high and they prefer to wait until they drop slightly to make their purchase. Only 39 per cent of people here are planning to buy, versus 52 per cent that said they were planning to purchase in 2012.
“The relative strength of the Canadian housing market continues to bolster homeowners’ confidence, while improving affordability across all regions reflects that Canadians are making responsible choices when it comes to financing a home,” said Martin Nel, vice president of lending and investments at BMO.
And if there’s a group that can be said to be considering making the most purchases of all, it would be those that are under 40 years old. 46 per cent of survey respondents in this category said that they were planning on buying; and 24 per cent of those said that they were considering moving to a neighbourhood that was more expensive. Only 8 per cent of this group said that they were looking for a community where the cost of living was actually lower than where they are now.
But younger buyers weren’t the only group the survey focused on; it also asked about investment and vacation properties – and both were down when it comes to people’s intent to buy either. While vacation properties dropped by 2 points to eight per cent, homeowners planning on buying investment properties also dropped 2 per cent, from 8 to 6 per cent.