Canadians think the low mortgage rates are here to stay—and aren’t planning on buying anytime soon

Canadians are not planning to buy houses in the next two years, according to a poll of the Royal Bank of Canada released Thursday.

Even with mortgage rates at record lows, RBC’s annual poll shows that 73 per cent of the respondents said they were not likely to buy a house in the next two years. The same poll however showed a conflicting 59 per cent of the people questioned believed now was the best time to enter the market rather than next year, a big leap from the 41 per cent last year.

Marcia Moffatt, the head of home equity financing for RBC, tried to explain the confusing results: “I would say that people are pretty conflicted around home buying intentions,” Moffatt told the Canadian Press. “Consumer sentiment is not all pointing in the same direction.”

But Canadians’ confidence in stability has remained high, according to the RBC poll. Approximately 88 per cent of those polled believed a home is a good investment, and 46 per cent expected mortgage rates to stay at ultra-low levels in 2013, while only 30 per cent believed in constant low-rate mortgages in 2011.




Browse

Canadians think the low mortgage rates are here to stay—and aren’t planning on buying anytime soon

  1. Confusing results? Not really. Bring “affordability” into the mix and you’ve got the answer.

    • I agree. However, it seems that an overwhelming majority of people think can`t correlate affordability with market expectations. Trying to reach an intelligent conclusion about where the housing market is headed by surveying clueless market participants is a futile effort at best.

  2. No, seriously…where is the confusion? Just because people think this is a great time to buy a house, alot of other factors go into whether they will be buying one in two years. More information, like where this number lies on a trendline, or who they were asking, would help, but this is a non-mystery as currently described.

  3. When the price of a home is less than triple the gross family income, housing is affordable.  A family making (say) $75,000 combined could afford a home worth $225,000.  Low interest rates skew that a bit an allow this family to afford a more expensive home.  Still, it is a good rule of thumb. 

    Once a house price gets to five times gross family income, it becomes unafforable.  So, this same family would have an outer limit of $375,000 for a home. Again, low interest rates have caused some to extend their reach beyond this number.  The problem is that when interest rates rise to more normal levels, mortgages will become increasingly difficult to service.

  4. Agree with other comments. What is confusing about this? So what is 73% aren’t planning to buy a house in the next 2 years? Is that below the normal number? The article doesn’t say, and I’d be surprised if it was. I think that’d be a MASSIVE amount of turnover if over 27% of Canadians were willing to buy a house every 2 years!

    Also, just because people think now is a good time to buy, that doesn’t mean that they personally think they themselves SHOULD buy. They are just saying it is a good time for buyers, but if you have a house and are happy where you are, why would you sell?

    What a silly article.

Your email address will not be published. Required fields are marked *