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Poll says mixed message from prairie residents about home buying intentions
Mar 27, 2013

 

There is contrasting consumer sentiment among Prairie residents 
towards confidence and home-buying intentions, with 89 per cent of 
respondents in Manitoba and Sas-katchewan saying that they do not expect to buy a home in the next two years, while 88 per cent say buying a house or condo is a good investment, according to a new poll released last Tuesday.
The confidence in the long-term value of buying a home is similar to Alberta at 89 per cent and above the national average of 84 per cent, indicated the 20th annual RBC Homeownership Poll.
“Saskatchewan and Manitoba experienced one of the most robust periods of housing activity in the country recently,”said Richard Schwan, regional vice-president, Mortgage Specialists, RBC. “It makes sense that residents are assessing current conditions and their options, and taking a wait-and-see approach compared to other areas in Canada.
“The good news is that they have tremendous confidence in the long-term value of their home,” he added.
“We had a 10-year tear in the local housing market, starting in 2003,” said WinnipegREALTORS® market analyst Peter Squire. “Now, there’s some holding back that we haven’t seen in the last few years. We’ve had a slow February and first part of March, but consumer confidence is still high.
“Buyers are adopting a wait-and-see attitude to see how the spring market will unfold,” he added.
Squire said some of the recent cooling in the Winnipeg and surrounding area market can be attributed to the federal changes to mortgage regulations, especially among first-time home buyers. 
Last July, federal Finance Minister Jim Flaherty lowered the amortization period for mortgages from 30 to 25 years, which increases the monthly mortgage payments for home buyers.
According to the poll, 56 per cent of residents in Manitoba and Sas-katchewan said it makes more sense to wait until next year to buy a home, in contrast to the national 
average that believes it makes sense to buy a home now given current housing and economic conditions at 52 per cent.
The poll found that 84 per cent of Prairie respondents said the housing market in their community is overpriced and more than half of residents at 55 per cent in Manitoba and Saskatchewan said it’s a seller's market, more than double the national average of 25 per cent. 
But Squire said the slowdown in the past couple of months will “give buyers more of an opportunity to find the house they want.”
According to the poll, one-third describe the current housing market as a balanced market and even fewer would call it a buyer’s market at 12 per cent.
Slightly more than half of residents in Manitoba and Saskatchewan expect mortgage rates to be higher at this time next year, while 46 per cent think they will be the same as they are today. The region has the lowest percentage of respondents who think interest rates will be lower a year from now at two per cent.
“The more cautious mood this year is not surprising and is consistent with broader economic and industry forecasts,”said Sean Amato-Gauci, senior vice-president, Home Equity Financing, RBC. “An unseasonably warm spring, low rates and anticipation of mortgage rule changes may have led many Canadians to move forward their home purchases in the first half of 2012.
“Our findings suggest confidence in the housing market is still high and young Canadians are the bright spot as they look to buy their first home and seek the advice to do it right,” added Amato-Gauci.