despite projections of increases in borrowing costs which could hit the real estate market, some 64 per cent of Canadians remain optimistic, expecting the value of property in their neighbourhoods to rise over the next six months. This amounted to one the fastest 7-increases in confidence as this figure was at 60 per cent last week.
250 Canadians are being surveyed by Nanos Research every week regarding their views on personal finances and their outlook for real estate prices and the economy as a whole. Optimism on house prices have risen past 64 per cent only once before in April last year, when it hit multiple weekly records. Meanwhile, the proportion of respondents who expect prices to fall also reached on of the lowest on record, at 5.6 per cent.
According to the head of the Office of the Superintendent of Financial Institutions, Peter Routledge, home prices are set to decline by up to 20 per cent in some regions. However, some economists claim that the BoC’s decision to wait until next month to increase rates may actually be fuelling the housing market. “There’s a chance that the decision to wait five weeks to start pushing policy rates higher could provide further fuel to the already raging inferno that is Canadian housing,” Benjamin Reitzes, rates and macro strategist with Bank of Montreal, told the Financial Post. “There’s little doubt that based on housing alone, rates need to be higher.”
