home heart

Photo: Ken Ratcliff/Flickr

Despite the bubble talk and debt concerns, Canadians seem to be pretty happy when it comes to their decisions to own homes. The Canadian Association of Accredited Mortgage Professionals (CAAMP) released a new consumer survey to gauge who’s buying homes and how confident they are with their big investments.

The survey didn’t pick up on much buyer’s remorse with 91 per cent of respondents saying they were happy they bought a home. One surprising stat – the CAAMP says that 55 per cent of homes purchased in 2013 were bought by first time buyers.

However, younger folks were largely less optimistic than the older crowd. More than half of consumers expect the housing market to stay stable with prices plateauing or increasing slowly in the next five years, but 16 per cent of 18 to 24-year olds and 12 per cent of of 25 to 34-year olds think the bubble will burst. Bubble belief dwindles with the advance of age: only 6 per cent of 55 to 64-year olds and 5 per cent of the 65-plus crowd think we’re in for a pop.

Altogether, 33 per cent of Canadians surveyed are predicting the market will see slow growth in valuations, the most popular predication by far. But those aged 45 years and older were also considerably more likely to think that values will slowly inch up in the years ahead. While 28 per cent of 25 to 34-year olds and 24 per cent of 35 to 44-year olds think values will slowly increase, the 45 to 54, 55 to 64 and 65 and over groups shared this belief at a rate of 34 per cent, 37 per cent and 45 per cent respectively.

See more details here:

Home Values Survey

When it comes to mortgage debt, about 65 per cent of Canadians surveyed say they are “comfortable” with their mortgages and 66 per cent agree in some degree that mortgages are a form of “good debt.”

The average mortgage interest rate currently sits at 3.24 per cent, a decline from the 3.5 per cent average in the fall 2013 survey.

About one-in-six mortgage holders also voluntarily increased their regular payments during the past year. The average amount of increase was about $375 per month. Moreover, 14 per cent of the mortgage-holders surveyed said they made lump sum payments in the last year, with the average amount sitting at about $10,000. More details below:

Mortgage Payments Canada

“From the consumer perspective we have a picture of a very confident, healthy mortgage market,” said Jim Murphy, AMP, President and CEO of CAAMP in the news release.

Despite this general sense of satisfaction, the report does raise the spectre of a slowdown. It estimates starts will have dropped by 20 per cent by late next year, compared to 2011 and 2012 levels, which is a concern given how much of the economy is tied to the housing market. Each new single family home built in Canada is believed to create 2 to 2.5 “person years” of employment, so a slowdown would mean fewer jobs.

“Across Canada the housing market is slowing, and has been on a downward swing since the mortgage policy change in 2012. While the national market may look healthy, activity in the Greater Toronto Area (including Hamilton), the Greater Vancouver Regional District and the Calgary area is skewing the numbers high,” said Will Dunning, CAAMP Chief Economist, in the release.

“In the rest of Canada sales activity has weakened and house prices are flat, and even falling in some communities. Housing has played a key role in driving economic growth and job creation in Canada. But looking ahead, decreased starts and slower price growth will throw off the balance between the housing market and the overall economy.”

You can read the entire report here.

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