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Residential Market Update

General Kaveh Seyedsagha 29 Jan




Canada’s latest inflation numbers were not the sign anyone hoping for lower interest rates was looking for.  Headline inflation, also known as the Consumer Price Index, rose to 3.4% in December, up from 3.1% in November.  Much of the increase was driven by high rents and increasing mortgage costs as report says by First National bank.

None the less, some recent surveys suggest Canadians are adjusting to the current situation and the “Fear of Missing Out”, FOMO, appears to be shifting to TOWA – “Tired of Waiting Around”.

The Canadian Pulse Report for the 4th quarter, from the research firm Dye and Durham, indicates only 20% of potential homebuyers are going to wait for prices to fall, and just 21% say they are going to wait for interest rate cuts, before they enter the market.

“Inflation is cooling and interest rates are stabilizing, and with that Canadians are telling us that they have renewed optimism in the outlook for their housing plans,” Martha Vallance, chief operating officer at Dye & Durham, said in a release.

That optimism is also reflected in the December Household Outlook Index from the data firm, Maru.  It suggests almost 40% of Canadians believe the economy will improve in the next 2 months, up from 33% back in October.  Canadians who intend to make big-ticket purchases edged up to 18% from an earlier reading of 17%.  Just over half say they will put money away for retirement, up from 48%.

The Bank of Canada’s 4th quarter survey of consumer expectations indicates Canadians are keeping a close eye on inflation and the economy and are adapting, and adjusting their finances in response.