Despite the negative implications COVID-19 has had on nearly every business sector, it appears the pandemic hasn’t had an (lasting) effect on the the real estate industry as Canadians still believe in the strength of the housing market — despite growing concerns of the overall economy.
On Monday, RBC released the latest edition of its Home Buying Sentiment Poll, which found that just 18% of Canadians consider the overall economy stable, while around 45% are confident in the housing market’s strength.
The poll, which provides updates on current perceptions and sentiments related to the Canadian housing market, found that while the vast majority of respondents were concerned about the financial impacts of COVID-19 (78%), less than half of respondents polled said they were concerned about the impact the second wave of the pandemic will have on the real estate market (43%). Moreover, only 19% said they believe the pandemic has weakened competition within the real estate market and made it easier to buy a home.
When asked, 80% of respondents said that home ownership is a good investment right now, with 52% believing that home prices will go up in the near future. Another 60% said that homes in their respective locales are overvalued, and 56% said that affordability will only worsen in the near future.
Amit Sahasrabudhe, Vice-President, Home Equity Financing, Products and Acquisitions, RBC, noted that high home values continue to drive many Canadians further outside of major city centres, both in search of affordability and more space.
“Many Canadians continue to be financially resilient in the face of the pandemic, and this has carried over into the real estate market. Seen as a pillar of stability, Canadians continue to view home ownership as a worthwhile pursuit and are willing to shift their priorities in order to find affordable property within their budget.”
When asked, Canadians said they were most interested in purchasing property in the suburbs or a commuter city (38%), followed by rural areas (26%). Only 14% of respondents said they would look to purchase a home in a major metropolitan area.
What’s more, more than half of respondents said that home values in their area were unaffordable (59%). With an average Canada-wide budget of $445,237, which falls below the average nationwide home price value, almost half of respondents polled stated that if they wanted to buy or own a larger home, they would likely have to move out of the city they’re currently living in (45%).
“Despite the pandemic, Canadians continue to remain optimistic when it comes to the future and their finances,” concluded Sahasrabudhe. “Many Canadians remain confident in their ability to save and continue to aspire to make their dream of owning a home a reality.”
This survey follows the release of the Bloomberg Nanos Canadian Confidence Index (BNCCI), which revealed Canadians are currently showing the highest level of real estate market optimism in the past nine months, further suggesting confidence in the Canadian housing market continues to grow even as the country grapples with the current resurgence of COVID-19 that’s slowing the greater economy.