Residential Market Commentary - Rapidly evolving expectations: The latest
With pretty much every aspect of everyday life revolving around the coronavirus pandemic and COVID-19, the Canadian housing market keeps spinning higher.
In the fifth, and final, installment of its examination of the Rapidly Evolving Expectations in the Housing Market, Mortgage Professionals Canada reports, that trend is likely to continue.
The MPC survey suggests the pandemic has done little to dampen the desire for home ownership. In fact, the latest edition shows a remarkable increase in the number of non-homeowners who intend to buy within the next 12 months. It has risen from 7% at the end of 2019 to a, striking, 27% at the end of January 2021 – that number climbing through all five of the surveys. The desire to purchase among current homeowners rose from 7% to 10%.
The author of the reports, MPC Chief Economist Will Dunning, cites three contributing factors:
- The pandemic is fueling the desire to change living arrangements (be it the need for more space or the ability to work remotely)
- Exceptionally low interest rates allow for improved affordability despite large price increases
- And, to some extent, panic buying triggered by the “fear of missing out” (FOMO)
Optimism about better personal finances also appears to be a factor.
While nearly 30% of people (in some cases) have experienced negative impacts on their employment and financial situations, there are about 30% who are optimistic there will be improvements. Almost half expect little or no change. About 10% are worried their situations could get worse.
The survey also suggests there is a higher degree of optimism among people who are experiencing impaired incomes. More than 40% of the people in this group feel things will get better. Nearly 30% worry things will get worse. About one-quarter expect little change.