The majority of Canadians feel now is a good time to buy a house. Except that they won’t take the leap.
The 19th Annual RBC Homeownership Poll found that 59% of those polled say this is the right time to get into the housing market, but another 41% would rather wait until next year.
“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 Marcia Moffat, head of home equity financing, RBC. “Considerations such as affordability and available housing choices may be the difference between intent and reality when purchasing a home.”
The dichotomous approach of Canadians to homeownership is imputed to the current low interest rate environment and the fear of future hikes.
Prospective homebuyers who plan to buy in the next two years cited some concern about home prices increasing (23%) and mortgage rates rising (22%), followed by their current debt levels (20%), qualifying for a mortgage (19%), and having a good down payment (16%).
Therefore, despite improving confidence in homeownership, 73% respondents say they are unlikely to buy within the next two years.
“Steady as she goes seems to be the order of the day,” said Moffat.
Thirty eight percent of Canadians characterize the current environment as a buyer’s market, compared to 27% who believe sellers have the upper hand. Another 36% believe that the housing market is balanced.
A majority of Canadians (88%) believe housing is a good investment and more than two-thirds (68%) believe the value of their home has increased in the past two years. Three-quarters of Canadians (74%) feel they are well-positioned to weather a potential downturn in home prices.
Regionally, Albertans lead the country in saying now is the time to get into the housing market (69%), compared with 59% nationally, rather than waiting until next year (31%, compared with 41% nationally).
British Columbians are narrowly divided: 52% say it makes more sense to buy a house now, while 48% prefer to wait until next year, given the uncertainty of housing prices and economic conditions.
Ontarians lead other Canadian regions about confidence in real estate, with 90% saying a house or condo is a good investment. They are also the most likely in Canada to describe the current housing market as balanced (39% compared to 36% nationally).
Less than half of Canadians (47%) feel housing prices will be higher this time next year, while more Canadians expect prices to be stable (30%). Nearly half of respondents (46%) expect mortgage rates to stay the same next year, while fewer anticipate higher rates (41%).