Residential Market Commentary - Hopes for home ownership stay strong
The desire for home ownership remains strong in Canada. The latest home buying sentiment poll by one of the country’s big banks suggests nearly 60% of Canadians aspire to own a home. Just over half of those people are looking for a detached home.
Affordability continues to be a key concern with roughly 60% of respondents saying homes in their area are unaffordable. According to the survey the average home buying budget in Canada stands at $445,000. The Canadian Association of Realtors (CREA) puts the average price of a home (all types) at $607,000.
Not surprisingly a significant portion of those polled – 45% – expect they’ll have to leave their current city to buy a bigger house. Changing housing needs and the desire for larger properties are key drivers of the market right now.
There is some relief for these buyers in the form of on-going, low interest rates. The Bank of Canada has made it clear it does not see rate increases happening until 2023.
With the swift roll-out of COVID-19 vaccines the economy is expected to make a strong, but choppy, recovery.
“Certainly, the earlier-than-expected arrival of the vaccine is a very positive development. But we are starting off in a deeper hole,” says Bank of Canada Governor Tiff Macklem.
The central bank is looking for stability and sustainability in the recovery. Analysts and market watchers expect to see the Bank cut its quantitative easing program before turning to interest rate increases as the economy improves and inflation moves, sustainably, back toward its 2% target.