Interest rates delay real estate plans
While many Canadians remain concerned about a potential recession and the burden of high-interest rates, a growing number say they feel in a better financial position than a year ago.
The Dye & Durham Canadian Pulse Report for Q1 2024, which polled 1,015 Canadians, found that nearly four in 10 (39%) believe Canada is already in a recession, up from 31% in Q4 2023.
However, there has also been a significant increase in optimism, with 20% now believing the country will avoid a recession entirely - up from just 9% in the previous quarter.
“Canadians are growing more optimistic about their financial horizons, laying a strong foundation for future economic growth and upswings,” said Martha Vallance, chief operating officer of Dye & Durham.
The survey found that 28% of Canadians, particularly younger respondents, feel they are in a better financial position than a year ago, up from 20%. The number of people who feel worse off fell from 44% to 39%.
However, high-interest rates continue to impact spending, with respondents anticipating increases across categories like groceries (87%), gas (78%), insurance (69-70%), and rent (58%) in the year ahead.
Reflecting this, the number of Canadians planning to wait for lower rates before buying or selling a home rose to 26%, up from 21% in Q4 2023. The share looking to purchase their first home fell slightly to 7%.
“Many are eagerly awaiting lower rates to jump back into the housing market, and it’s clear that the expected interest rate cuts in the latter half of 2024 will bolster pent-up demand for housing,” Vallance said.
This “surge in activity could result in a slower spring real estate market that quickly ramps up in the second half of 2024,” she added, benefiting professionals like lawyers and realtors.
Meanwhile, 87% of Canadians still feel housing affordability has deteriorated over the past year. However, the share willing to relocate for more affordable housing has held steady at around 53%.
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