Residential Market Commentary - Glimpses of optimism
Things are looking up, a little, as Canadians navigate through the COVID-19 pandemic. The latest measure of confidence delivered by Bloomberg and Nanos Research suggests Canadian consumers are feeling better about the economy, the recovery and home prices.
The confidence index has been on a steady rebound, climbing for seven consecutive weeks, since plunging to record lows in April. In the latest survey it stands at 42.86, up nearly 3 points from the previous tally. (The surveys averaged 57 in the year before the pandemic.)
The survey suggests Canadians increasingly feel that the worst of the pandemic-induced downturn is over, but the pessimists still outnumber the optimists by more than three-to-one. About 20% of those surveyed feel the economy will be stronger in six months while 62% believe it will be weaker. That is a significant change from the 80% who forecast things getting worse and the 7% who predicted improvement, just a few weeks ago.
Forty-two percent of respondents say home prices will fall over the next six months. That is down from 49%, four weeks ago.
There are other positive signs. Canadians do not appear to be loading up on more debt during the lockdown. The credit monitoring service, Equifax, reports consumer debt levels were almost 0.5% lower at the end of March, compared to a year earlier. This would seem to indicate that government support programs are working.
Federal figures show the number of personal bankruptcies dropped to a record low in April.
The numbers also suggest the youngest and the oldest demographics – those often deemed to have the weakest ability to repay – are borrowing less.