New study also reveals Canadians’ main areas of concern when buying a home
Most Canadians feel that the current low-rate environment is driving up the prices of homes, according to a new survey from Zoocasa.
The listings site recently polled over 1,400 Canadians over the first two weeks of August and found that 80.5% of respondents feel that interest rates have driven up the prices of homes.
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Additionally, 34.4% said lower rates did not improve affordability for home buyers.
The Bank of Canada (BoC) has kept the overnight lending rate at its “effective lower bound” of 0.25% since March 2020 to shield the country’s economy from the financial impact of the COVID-19 pandemic. The BoC is expected to maintain the current rate until at least the second half of 2022.
According to Zoocasa, the low-rate environment has sparked an “unprecedented sales and price growth” over the course of 2020 and 2021.
And while recent data from the Canadian Real Estate Association showed that the market has cooled slightly – with home sales across Canada seeing a 3.5% month-over-month slowdown in July – respondents say they still feel the pressure from tighter conditions.
“Overall tight market conditions are top of mind – when asked about the main areas of concern when purchasing a home, respondents indicated affordability, engaging in a bidding war, and timing the market were the top three,” Zoocasa said in its report.
