Photo: Michael Gil/Flickr
It may be the approach of tighter mortgage regulations, or the way sunken oil prices continue to take a toll on housing markets in the Prairies — but whatever the cause, Canadians’ confidence in the real estate market seems to be lagging.
According to the latest Bloomberg Nanos Canadian Confidence Index (BNCCI) — based on a 1,000-person Nanos telephone survey conducted over the week ending December 24th — the share of respondents who see an increase in local real estate prices dropped 3.9 percentage points, the biggest decrease since Nanos began weekly polling in May 2013. The share of those who see prices decreasing rose to 18.6 per cent, the most since February.
Answers to the question of whether respondents thought property values in their neighbourhood would rise, remain flat, or drop over the next half year are the basis of the BNCCI real estate sub index, which measures 31.5 overall this time around, down from 35.4 a week earlier.
“Consumers have reacted to the extremely low level of interest rates with a worrisome imbalance between housing market speculation and traditional household investment,” Bloomberg Economics spokesperson Robert Lawrie said in a statement. “It seems likely that consumer expectations and spending might suffer until labor market displacement issues are addressed and households can repair their balance sheets.”
In all, the BNCCI is based on answers to four questions that touch on the topics of job security, personal finance, real estate, and the economy at large, respectively. Overall, the most recent consumer confidence index declined to 54.5 from 55. Bloomberg says the index’s “national results are considered accurate to within 3.1 percentage points, 19 times out of 20.”
Recently, Bloomberg reported major employers in Calgary are set to add to the estimated 40,000 oil and natural gas positions lost over the past year and a half by slashing additional jobs in the new year.
That probably doesn’t bode well for future consumer confidence polls.