Canadians cool on homebuying despite low interest rates

While interest rates may be low, with little expectation of that changing anytime soon, an increasing number of Canadians do not believe that it’s a good time to buy a home.

A survey by Manulife found that just 25 per cent of those who currently rent plan to become home owners in the next 12 months despite 80 per cent saying that it’s their primary goal.

“Canadians say that owning a house is a top priority for them, yet they’re not willing to invest in housing right now,” said Kevin Headland, Senior Investment Strategist, Manulife Investments. “Perhaps investors are feeling the timing for this investment isn’t right. Many real estate markets are red-hot right now, which makes it difficult for Canadians to purchase a home, even if it is a priority for them. There are concerns that this housing bubble might just burst, leaving them with a bad investment.”

Among the 35 per cent of respondents who say that now is a good time to buy, low mortgage rates is the main reason (71 per cent) followed by “a secure investment” (45 per cent).

For the 23 per cent who say that it’s not a good time to buy, 72 per cent felt that homes are unaffordable, 32 per cent said the housing market is volatile and 20 per cent were concerned about their own finances.

Those in Atlantic Canada were almost twice as optimistic that it’s a good time to buy than those in British Columbia (45 per cent vs. 23 per cent).

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