Gloomy forecasts for the Toronto real estate market haven’t taken the shine off of homeownership, with a new bank survey pointing to buying intentions that remain well above the national average.
“The fact that 46 per cent of Canadian homeowners intend to buy a property in the next five years implies that Canadians are feeling confident in the current real estate market environment,” said Martin Nel, VP of lending and investments with BMO Bank of Montreal. “However, that certainty is tempered, given the adverse effect moderate increases in home prices and mortgage costs would have on the average homeowner.”
Even so, home-buying intentions in the Greater Toronto Area and Vancouver – Canada’s most volatile markets – outpaced the national average by 11 percentage points and 7 percentage points, respectively.
Prospective buyers in Calgary remain just as bullish on their market, with 62 per cent of respondents affirming their intentions to buy within the next five years, according to the BMO Housing Confidence Report released Tuesday.
That optimism hasn’t developed in a vacuum. Respondents expect prices to rise by 2.0 per cent over the next year while those in Calgary expect an increase of 2.4 per cent.
Those expectations may increasingly be out of step with the market.
The average price of a Canadian home climbed a more modest 1.1 per cent higher in September to $355,777.
The fact that the number sales fell 15 per cent that month relative to the same period last year may in fact bolster intentions to buy, argue some analysts, pointing to the effects of a slowing market on prices and the lure that holds for bargain hunters.
Source: Canadian Real Estate Wealth
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