A survey released today by Royal Bank suggests that Canada’s housing boom may be losing steam.
The survey of buying intentions over the next two years found the share of those who are “very likely” to buy had dropped to 10%. That’s down from 13% last year, and the lowest point in more than five years.
The percentage of those who plan to purchase a home in the next six months was slipped to 8%, down from 10% last year.
However, the 13th annual survey also found that overall intentions to buy a home in the next two years remained the same as in 2005 at 29%.
“This year’s results are a definite change from what we witnessed over the last five years,” Catherine Adams, Royal Bank’s vp for home equity financing, said in a release.
“The intention to buy is still evident, but the intensity to do so is nowhere near as great.”
Seventy per cent of those polled, versus 54% last year, said they believe mortgage rates will be higher next year, increasing the cost of buying.
If mortgage rates are to rise, more than half – 56% – of mortgage holders said they aren’t overly concerned because they have fixed rate mortgages, while 27% said they’ll probably make changes such as locking into a fixed-rate mortgage or splitting between fixed and variable.
Royal Bank said the only part of the country likely to see increased home buying activity is Atlantic Canada, where those “very likely to purchase” increased to 14%, from 8% last year.
Alberta held steady at 18%. But the numbers decreased in other regions, with British Columbia going from 16% to 11%; Saskatchewan and Manitoba going from 12% to 10%; Ontario from 14% to 10%; and Quebec moving to seven% from 11% last year.
The online poll was conducted by Ipsos-Reid between January 18 and January 24, based on a randomly selected representative sample of 2,001 adult Canadians. The results are considered accurate for the entire adult Canadian population within 2.2 percentage points, 19 times out of 20.