Manitoba and Saskatchewan could see a slight slowdown in home purchases this year, according to RBC Royal Bank’s 15th annual Homeownership Survey.
“This year, we’re seeing some softening in buying intentions in both Manitoba and Saskatchewan, similar to the rest of the country," said Don Peard, vice-president, Mortgage Specialists. “But for those planning to buy a home this year, most won’t shy away as people in Manitoba and Saskatchewan remain confident that buying a home is a sound investment.”
Among those looking to buy within the next two years, 79 per cent said they will likely purchase a resale home, and 71 per cent said they would be looking to buy a detached house. A majority (57 per cent) of those polled said they plan on buying a larger home than their current residence, while only five per cent said they would be looking for something smaller.
The number of Manitoba and Saskatchewan residents who would “buy now ”rather than wait until next year remains strong at 58 per cent, slipping only one percentage point from last year.
Nationally, the percentage of Canadians who would “buy now” is 52 per cent.
“Considering the flurry of activity we’ve seen over the last few years, this year’s
results definitely signal a change,” said Catherine Adams, RBC Royal Bank’s vice-president, Home Equity Financing.
“While those very likely to buy a home might be at its lowest level in over a decade, we need to keep in mind that the overwhelming majority of Canadians still believe purchasing a home is a good investment. Canadians continue to be generally very optimistic about our housing market and it’s merely the degree of optimism which is down from last year,” she added.
The poll found that only nine per cent of Manitoba and Saskatchewan residents are “very likely” to buy a home, while those who are “somewhat likely” to buy fell nine percentage points from last year to 12 per cent.
In addition, 86 per cent of residents from the two provinces continue to
believe buying a house or condominium is a “good” or “very good” investment.
Manitoba and Saskatchewan homeowners on average estimate the market value of their homes to be $168,444, which is well below the national average of $239,560.
Residents estimate that the average value of homes in the two provinces has increased by 33 per cent over the last two years — among the highest percentage increases in the country.
According to the poll, 14 per cent of Manitoba and Saskatchewan residents who plan to buy a home in the next two years say they will choose a variable rate mortgage, down two percentage points from last year.
While fixed rate mortgages remain a popular choice with 42 per cent of respondents planning to lock in their rate, the most popular mortgage option at 44 per cent is a combination of both fixed and variable.
“Despite all the concerns we’ve heard about the U.S. housing market,” said Adams, “Canadians do not appear to be heading towards a housing crunch. The proportion of Canadians who say they have a mortgage has leveled off from 2007, with the average mortgage amount left to pay unchanged from last year.
“The intended down payment amount for those planning to buy has also risen this year, which further suggests we continue to have a healthy housing market,” she added.
In Manitoba and Saskatchewan, only 42 per cent of homeowners are still paying off a mortgage, which is the lowest percentage in Canada.