Fewer than one in 10 Canadians believe that the BoC rate freeze had a positive impact on their interest in the housing market
Nearly four in five Canadians (79.1%) admitted that another rate increase by the Bank of Canada would negatively affect their interest in the real estate market, according to a new poll by Zoocasa.
Amid a backdrop of 3.8% annualized inflation in September and a 5% BoC benchmark lending rate, Zoocasa said that national home sales fell for the third straight month in September while new listings increased by 12.6% month-over-month.
However, while the central bank decided to keep its policy rate frozen last month, only 9.1% of respondents to the Zoocasa survey “strongly agreed” that the September policy decision had a positive impact on their interest in the housing market.
On the other end of the spectrum, 16.1% “strongly disagreed” that the pause had a positive impact.
“This suggests it’s going to take more than just a pause from the Bank of Canada to get homebuyers off the sidelines,” Zoocasa said.
CIBC's Deputy Chief Economist, Benjamin Tal, expects the Central Bank's trendsetting rate to remain stable in the first half of next year before declining.
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 18, 2023
Read more: https://t.co/5z7T8wOSMM#MortgageIndustry #RateHike #InterestRates #Inflation #EconomicOutlook
Canadian government should do more to improve affordability
Nearly two in five (38.9%) of the Zoocasa respondents said that they “strongly disagree” with the statement that the government of Canada is doing enough to address the housing affordability crisis. Only 5.4% “strongly agree” and 14.3% “agree”, while 15.6% “disagree” and 25.9% were neutral.
“As the government aims to welcome 485,000 newcomers in 2024 and 500,000 in 2025, the demand for housing will grow and unless more effort is put into boosting supply, inventory struggles will continue,” Zoocasa warned.
Over the past five years, home prices have spiked significantly in Canada’s major markets, particularly in the Greater Toronto Area and Greater Vancouver. During that period, the markets saw their residential prices increase by $386,200 and $209,800 respectively, Zoocasa said.
