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Proceeding with Caution: RBC Poll Finds Majority of Canadians Say It Makes Sense to Buy a House Now, But Fewer May Actually Take The Leap

Overwhelming majority of Canadians still confident in homeownership and see market shifting in favour of sellers

TORONTO, April 5, 2012— An increasing majority of Canadians believe that now is the time to get into the housing market (59 per cent, up four percentage points from last year), instead of waiting until next year (41 per cent), according to the 19th Annual RBC Homeownership Poll.

This year, slightly more Canadians say they are unlikely to buy within the next two years (73 per cent, up two percentage points), even as confidence in homeownership is on the rise. A majority of Canadians believe housing is a good investment (88 per cent, up two percentage points from last year) and more than two-thirds (68 per cent) believe the value of their home has increased in the past two years, similar to last year (69 per cent). Three-quarters of Canadians (74 per cent) feel they are well-positioned to weather a potential downturn in home prices.

"There's a mix of opinions on the housing market, as Canadians still feel confident about real estate but are a little uncertain about where the market is heading and when it makes sense to buy," said Marcia Moffat, head of home equity financing, RBC. "Considerations such as affordability and available housing choices may be the difference between intent and reality when purchasing a home."

Market sentiment shifting to sellers, more expect stable housing prices

The RBC poll found that after four years of sentiment favouring a buyer's market, the tide appears to be turning. More Canadians surveyed this year feel the current housing market is a seller's market, in which sellers have the advantage because the number of buyers exceeds the number of homes available (27 per cent, up from 20 per cent in 2011). Nearly four-in-10 Canadians say it is a buyer's market, in which buyers have the advantage because the number of houses available exceeds the number of buyers (38 per cent, down two percentage points from a year ago). Fewer believe that the housing market is balanced (36 per cent, down from 40 per cent a year ago).

Less than half of Canadians (47 per cent) feel housing prices will be higher this time next year, down five percentage points from last year (52 per cent), while more Canadians expect prices to be stable (30 per cent, up from 27 per cent in 2011). Nearly half of respondents (46 per cent) expect mortgage rates to stay the same next year, up sharply from 30 per cent in 2011, while significantly fewer anticipate higher rates (41 per cent, down sharply from 60 per cent in 2011).

"Steady as she goes seems to be the order of the day here, as more Canadians see stable home prices and mortgage rates over the next year," added Moffat. "There's a lot of information out there. Getting expert advice from a mortgage specialist on financing options and the all-in costs of home ownership can help you make an informed decision."

Price and mortgage increases top concerns

Prospective homebuyers who plan to buy in the next two years cited some concern about home prices increasing (23 per cent) and mortgage rates rising (22 per cent). These were followed by their current debt levels (20 per cent), qualifying for a mortgage (19 per cent), and having a good down payment (16 per cent).

Highlights from across Canada:

British Columbia: British Columbians are narrowly divided when asked whether it makes more sense to buy a house now (52 per cent) or wait until next year (48 per cent), given current housing prices and economic conditions. Two-thirds of prospective homebuyers in British Columbia (66 per cent) said they were not likely to buy a home within the next two years, well below the national average (73 per cent).

Alberta: Albertans lead the country in saying now is the time to get into the housing market (69 per cent, compared with 59 per cent nationally) rather than waiting until next year (31 per cent, compared with 41 per cent nationally). More than half of Albertans (55 per cent) surveyed say current housing conditions reflect a buyer's market, a sentiment that leads the rest of Canada (38 per cent). This mood is underscored by a higher-than-average appetite to buy a home within the next two years (31 per cent, compared with 27 per cent nationally).

Prairies: A majority of residents in Manitoba and Saskatchewan (52 per cent) say it makes more sense to wait until next year to buy a home, the only region that was countering popular national sentiment that showed the time to buy is now (59 per cent). Just under half of respondents in the Prairie provinces (48 per cent) said it made sense to buy a house now. Three-in-five respondents in the Prairies (60 per cent) say the current housing market is a seller's market, more than any region across the country and more than double the national average (27 per cent).

Ontario: Nine-in-10 Ontario residents (90 per cent) say a house or condo is a good investment, leading other Canadian regions surveyed about confidence in real estate. Ontarians are also the most likely in Canada to describe the current housing market as balanced (39 per cent, compared to 36 per cent nationally).

Quebec: Quebec homeowners are the most confident in Canada that they are well-positioned to weather a potential downturn in house prices (78 per cent, compared to national average of 74 per cent). Furthermore, overall confidence in homeownership is high in the province (87 per cent believe a house or condo is a good or very good investment, compared to 88 per cent nationally). A majority of Quebecers believe now is the time to get into the housing market (57 per cent), a little below the national average (59 per cent), instead of waiting until next year (43 per cent, compared to 41 per cent nationally).

Atlantic Canada: Residents in the Atlantic provinces are far more likely than the average Canadian to say it makes more sense to buy a house now (68 per cent, compared to 59 per cent nationally) than wait until next year (33 per cent, compared to 41 per cent nationally). Atlantic Canadians hold a high degree of confidence in their homes as a good investment (86 per cent, compared to 88 per cent nationally). Even so, the majority of residents in these provinces are unlikely to purchase a home within the next two years, matching the national sentiment (73 per cent).

Canadians can visit the RBC Advice Centre, an online resource to help Canadians understand all facets of homeownership. Through advice videos, articles, and online calculators, Canadians can learn about buying their first home, planning their next move, or renovating. With the guidance of RBC mortgage specialists, Canadians have access to free, no-obligation professional advice about RBC mortgage products and services.

About the RBC 19th Annual Homeownership Poll
RBC is the largest residential mortgage lender in Canada. 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. The RBC 19th Annual Homeownership Poll was conducted by Ipsos Reid between January 24 - 30, 2012. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted probability sample of 2,006 adult Canadians, with 100 per cent response rate would have an estimated margin of error of ±2 percentage points, 19 times out of 20. The margin of error will be larger within regions and for other sub-groupings of the survey population.

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For more information, please contact:

Matt Gierasimczuk, RBC Corporate Communications, 416-974-2124
Ka Yan Ng, RBC Corporate Communications, 416-974-1794

 

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