Canadians are growing increasingly uneasy about buying a house in this cooling market.
Indeed, just 15 per cent of those polled by Ipsos Reid say they’ll probably buy a house in the next two years. That’s down from 27 per cent last year, and marks the biggest drop in buying intentions ever in the annual poll, now in its 20th year, done for Royal Bank of Canada.
This comes amid a cooling housing market with an uncertain outlook, tamed, among other things, by the Canadian government’s attempt to bring it back to earth via changes in mortgage rules, though residential real estate is still seen as a good investment. And most observers still expect a soft landing.
About 75 per cent of the 3,000 people polled between Jan. 31 and Feb. 8 cited the mortgage market restrictions for delaying buyers, though this could be “more perception than reality,” RBC said.
That’s because six of 10 survey respondents don’t see a 5-per-cent minimum down payment and a shorter amortization – now 25 years versus 30 years – as being that big a deal.
And almost half of those polled believe mortgage rates are going to be at the same level next year, suggesting they see no rush at this point.
There are regional differences, of course. More than half of those polled in British Columbia, where Vancouver is in the eye of the storm, believe they’re now in a buyer’s market. That compares to 35 per cent across the country.
“B.C.’s housing market is catching its breath after a period of historic activity and price increases,” said RBC’s Inde Sumal, a regional vice-president.
“It makes sense that buyers are taking their time to decide if they should buy now or wait.”
Ontario, where Toronto is the other market in the spotlight, pretty much tracks the national average, with 86 per cent saying they don’t plan to buy in the next two years.