Canadians don’t expect mortgage rates to rise, but do expect housing prices to go up, says RBC survey
Canadians voicing “buy now rather than later” preference
TORONTO, March 6, 2007 — The possibility of mortgage rates rising in 2007 seems to be of much less concern across Canada, according to RBC’s 14th Annual Homeownership Survey. In fact, over half (57%) of Canadians believe mortgage rates will drop or stay the same, compared to 31% last year. The RBC poll also reveals that 49% of Canadians are less apprehensive about interest rate increases, compared to 44% in 2006.
“When we assess the consumer sentiment being expressed in this year’s study, a picture emerges of confident Canadians weighing their home buying options in a very positive light,” explained Catherine Adams, RBC’s vice-president of Home Equity Financing.
At the same time, while over half of Canadians (59%) believe housing prices will rise in 2007, home buying intentions are holding steady, with three in ten Canadians (28%) planning to buy a house over the next two years.
As for the value Canadians place on home ownership, the vast majority
(90%) think purchasing a home is a good investment, according to RBC’s poll. As well, the percentage of Canadians who estimate that the market value of their homes has increased by 50% or more over the past two years, has doubled since last year’s survey (11% compared to 6%.)
“It’s clear an overwhelming majority of Canadians believe purchasing a home is a good investment. In fact, the average Canadian estimates their home has increased by 22% in the last 2 years,” Adams added. “And the ‘buy now’ message is coming through loud and clear across all age groups - from 25 through to 55 plus.”
Of those Canadians planning to buy a house within two years, an increasing number are looking at a shorter purchasing window. Over half (58%) of all Canadians are saying buy now, don’t wait for next year. Forty-four per cent (up from 37% in 2006) are looking at buying within the next 12 to 18 months.
RBC Homeownership Survey 2007 Details
Regional differences
Focusing on very likely to buy intentions, BC, Ontario, and the Prairies are holding steady from last year, but the numbers have softened in other regions with Alberta going from 18% to 12%; Atlantic going from 14% to 10%.
Renters and owners
Of Canadians who plan to buy a house within the next 18 to 24 months, 62% are renters and 48% are owners. Within the shorter timeframe of the next 12 months, owners outnumber renters, 27% to 18%.
Housing type preferences
Detached homes continue to be the housing type of choice for most Canadians who are likely to buy a home in the next two years - 72% voiced this preference. Condominiums were preferred by 10%, down from 12% last year. Semi-detached homes were cited by 7%, up from 4% in 2006. Townhouses fell to last choice, named by 6% of Canadians planning to buy in the next two years, down from 8% last year.
More Canadians thinking “small” for next home purchase
Desiring a bigger house continues to be the most popular reason for an upcoming move, cited by 48% of Canadian home owners who are planning to purchase a home in the next two years. However, an increasing number are now saying they’ll be looking for a smaller home - 33% compared to 20% in 2006. Eighteen per cent responded that they’ll be considering a home about the same size as their present one.
Gently used tops newly built
Of Canadians planning to buy a house in the next two years, more are likely to buy a resale home (77%) than a newly-built home (23%). This compares to 74% who favoured resale in 2006, and 26% who preferred a newly-built home.
(These are some of the findings of an RBC poll conducted by Ipsos Reid between January 18 and 22, 2007. The online survey is based on a randomly selected representative sample of 2,404 adult Canadians. With a representative sample of this size, the results are considered accurate to within ±2.0 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. These data were statistically weighted to ensure the sample’s regional and age/sex composition reflects that of the actual Canadian population according to the 2001 Census data.)
RBC is the largest residential mortgage lender in Canada with more than $109 billion in loans outstanding at the end of 2006 and over 15.% of the Canadian mortgage market. As the country’s number one source of financial advice on homeownership, RBC conducts consumer surveys as one way to provide insight to Canadians about the marketplace in which they live.
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