March 6, 2006 Toronto, ON – The 13th annual RBC Housing Survey, conducted by Ipsos Reid, finds that nine in ten (90%) Canadians view home purchase as a good investment, up 18 points in seven years. In fact, 43% think home buying is a “very good” investment.
Today, two in three (66%) Canadians are homeowners and, on average, they estimate the value of their home to be $214, 337, with an average estimated rise in market value of 18% over the last two years.
However, it would appear that the market is softening. Three in ten (29%) Canadians say they are likely to purchase a home within the next two years, steady with last year’s findings. But, the intensity is the softest it’s been since 2000: just 10% indicate that they are “very likely” to buy. This softening is witnessed across most of Canada–that is, except Alberta where it is steady and Atlantic Canada where intentions are strong. It is also down across all age groups and renters/owners.
Those who plan to buy in the next two years are likely to purchase a detached home (especially in Atlantic Canada). And most are looking at resale homes (74%) and bigger homes (51%). As might be expected, condos are more popular among the young (18% 18-24) and the old (19% 55+) and downsizing is the trend for those 55 and older (56%). Most probably won’t buy for another 18-24 months (63%).
Mortgage ownership continues to rise: 60% of homeowners today have a mortgage compared to 56% last year. And, on average, homeowners with a mortgage have $95,840 left to pay. A majority (56%) of Canadians are concerned about interest rate increases for ’06 and 70% expect mortgage rates to be higher this time next year (up from 54% who said the same last year). If rates do rise, most mortgage holders won’t do anything because they’re in a fixed rate mortgage (56%), while 27% will probably change their status. Potential buyers over the next two years tend toward fixed rates (49% vs. 21% variable rate and 30% combination).
Four in ten (38%) homeowners indicate that they have borrowed against the equity of their home, up from 22% last year and 27% have refinanced their mortgage in the last year (up from 10% in 2005). But, few (9%) have intentions to refinance this year (but that’s what they said last year…). One-third (35%) say they would be comfortable borrowing against the equity in their home, on par with last year.
Finally, the survey also reveals that 12% of Canadians own investment property.
These are some of the findings of an Ipsos Reid/RBC Financial Group poll conducted from January 18th to January 24th, 2006. For the survey, a representative randomly selected sample of 2,001 adult Canadians was interviewed by telephone. With a sample of this size, the results are considered accurate to within +/-2.2 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. These data were weighted to ensure the sample’s regional and age/sex composition reflects that of the actual Canadian population according to Census data.
Ipsos Reid is Canada’s market intelligence leader and the country’s leading provider of public opinion research. With operations in eight cities, Ipsos-Reid employs more than 300 researcher professionals and support staff in Canada. The company has the biggest network of telephone call centres in Canada, as well as the largest pre-recruited household and on-line panels. Ipsos Reid’s Canadian marketing research and public affairs practices are staffed with seasoned research consultants with extensive industry-specific backgrounds, offering the premier suite of research vehicles in Canada – including the Ipsos Trend Report, the leading source of public opinion in the country – all of which provide clients with actionable and relevant information. Ipsos Reid is an Ipsos company, a leading global survey-based market research group. To learn more, please visit www.ipsos.ca.