Canadians more confident that housing prices are going to go up
Homebuyer confidence took a big hit at the start of 2018 when the federal government introduced its “stress test” rules, but Canadians are growing more assured that real estate values will go up again as the year approaches its end.
A poll released Friday by research company Nanos found that 44.21% of Canadians believe that the value of real estate in their neighbourhoods will increase in the next six months. This number is up from last week, when 42.7% of respondents reported the same, and also up compared to the 2018 average, which stands at 40.61%. Between 2008 and 2018, the national average stood at only 37.9%. Interestingly, Quebec is the province where confidence about real estate values is highest, with 61.49% reporting that they expected prices to go up. Less surprisingly, British Columbia and Ontario, home to the two most expensive housing markets in the country, follow closely behind, with 59.37% of British Columbians reporting confidence and 59.08% of Ontario residents.
Renters are more likely than homeowners to believe that home values are climbing. While 60.3% of renters believe that prices are slated to go up, only 56.13% of owners reported the same.
Experts are paying close attention to Canadian home prices this year following new “stress test” rules introduced by the Office of the Superintendent of Financial Institutions (OSFI) on Jan. 1 for all homebuyers taking out a mortgage. The rules require buyers to prove that they can afford either their bank’s five-year posted rate, or two percentage points higher than the rate offered by their bank or broker — whichever one is higher. As of July, the stress test has effectively stopped 100,000 Canadians — or nearly one in five buyers — from securing their first choice for a home, according to Mortgage Professionals Canada. Year-over-year sales generally declined for much of 2018. But, they’ve begun to pick up again in recent months, suggesting an uptick in demand and an eventual corresponding uptick in prices.