With so many stats released about how the market performed last month or last year, all of this information can obscure the fact that what matters to many potential homeowners is what will happen to the market in the future. Taking the pulse of current consumer confidence can help in this task.
Image: USACE Europe District / Flickr
RBC has released its annual Homeownership Study, and it shows that the housing market is not likely to cool off in the next few months. Ten percent of all of the people surveyed said they planned to buy a house in the next two years, compared to the seven percent the survey recorded in 2008. Younger respondents were the ones who showed the most eagerness to buy, with 15% expressing strong interest, compared to eight percent last year.
Undoubtedly, this is being driven by the increasingly stable market conditions and low interest rates. And many people think that now is the time to buy, as opposed to later: three-fifths of respondents said they think that average house prices will keep rising in 2010. This is a huge turnaround from 2009, when only a quarter thought house prices would rise.
Because of this optimistic view of house prices, and possibly because people are getting concerned about the volatility of the stock market, 91% of the survey respondents think that owning a home is a good way to invest your money, and a quarter think that their home will the main way they will pay for their retirement. This is the highest level for homeowner satisfaction that RBC has seen in 12 years.
A senior economist for RBC, Robert Hogue, says, “With the Canadian housing market showing continued vigour, it’s not surprising that Canadians feel more confident in the long-term value of owning a home.”
When they do buy a home, fixed-rate and combination fixed and variable rate mortgages are neck-in-neck in terms of popularity: fixed rate has 44%, and combination has 40% support. This supports the judgement that Canadians are optimistic about the future, but they are trying to be cautious as well, because not all of their questions are answered.
What should you take away from this survey? Essentially, that for buying and selling, now is a good time to take a leap into the market. With consumer confidence rising, there will be more people entering the market, and therefore, more opportunities to make the deal you want.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
