New poll outlines surprising results amid recession fears
Home-buying intentions in Canada appear to be intensifying despite widespread concerns about the possibility of a recession within the next year, according to a new consumer pulse report by Dye & Durham Limited.
While many Canadians prefer to wait and see until purchase prices (24%) and/or interest rates (23%) decline, 10% of respondents said that they are expecting to sell their primary residence and purchase a new one in the next year. This was a rate twice as high as that of the previous 12 months, Dye & Durham said.
The share of those planning to buy their first owned home in the next year also doubled from 4% in the past year to 8%, while the number of those intending to buy an investment/income property or secondary/vacation property went up from 5% to 8%.
Still, the report found that only 25% of Canadians believe they are in a better place financially than they were at this time last year. Nearly two in five (39%) indicated otherwise, saying that they are now in a worse place financially.
Lauren Haw of Zoocasa, anticipates that the real estate market will experience increased activity once fall begins, despite a slight cooling in national sales in July. https://t.co/zrbZWrehUg#mortgageindustry #housingmarket #houseprices
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 30, 2023
Purchasing power in the doldrums
The report noted that the Bank of Canada’s rate hikes over the past year and a half had a disproportionate effect on consumer purchasing power.
“A majority of Canadians say they’ve had to spend more on items like groceries (76%), gas (65%), and auto (58%) and home (56%) insurance” due to the hikes, Dye & Durham said.
“At the same time, many report they’ve had to put less money towards personal savings (53%), emergency savings (45%) and retirement/RRSP savings (35%) and reduce charitable donations (45%) due to high rates.”
Martha Vallance, chief operating officer at Dye & Durham, said that the downstream impact of the elevated-rate environment cannot be overstated.
“However, as rates begin to hold – and eventually decline – we expect to see a significant upswing in areas like real estate transactions, business originations and others that should help legal firms bounce back from a slower-than-normal year,” Vallance said.
