Photo: Doug Kerr/Flickr
Canadians have lost confidence in the potential for local home prices to increase as two recent developments cast long shadows over the country’s real estate market.
Some 46 per cent of Canadians expect home prices to rise in their neighbourhoods in the next six months, according to the latest weekly poll results from Nanos Research Group, published May 19th.
The share, though historically high, is down from 47.7 per cent in the preceding week and a record-setting 50.1 per cent recorded the week before that.
“After hitting an eight year high on perceptions of the future value of real estate in early May, perceptions are starting to normalize as the month closes out,” said Nik Nanos, chairman of the Nanos Research Group, which collects data for Bloomberg News.
“Despite promising signs for economic growth and the labor market, there is more than enough uncertainty to go around,” he added.
Nanos polls 250 consumers in Canada per week. It publishes the survey results every week, averaging responses over four weeks.
Bloomberg says the souring sentiment suggests Canadian alternative mortgage lender Home Capital Group’s much-publicized difficulties and Ontario’s Fair Housing Plan, which includes a Vancouver-like foreign-homebuyer tax for the Greater Golden Horseshoe and expanded province-wide rent control, are taking a toll on Canadians’ recently rosy real estate outlooks.
The Bloomberg Nanos Canadian Confidence Index, which reflects Canadians’ views on personal finance, the economy, job security and real estate, sunk mostly due to dimmer perceptions concerning real estate values. The index sat at 57.9, down from 58.1 the previous week.
“Consumers now have a less positive outlook on the economy and their job security than at the start of the year, and more recently on the value of their houses and personal finances,” said Nanos’ chairman.
“Households appear to be looking at the vulnerabilities in their portfolios, and only moderate wage growth seems unlikely to cover any potential balance-sheet losses,” he continued.