Warnings about a housing market on the verge of a U.S.-style meltdown may sell newspapers, but if consumer confidence is any indication, the Canadian housing market is just fine.
According to the 2013 Annual State of the Residential Mortgage Market in Canada report by the Canadian Association of Accredited Mortgage Professionals (CAAMP), mortgage-holders felt comfortable with their mortgage debt last year, seeing it as “good” versus “bad” debt.
“Consumer confidence in the mortgage market remains high, especially among people who have owned homes for a longer period,” said Jim Murphy, president and CEO of CAAMP, in a release on the report. “Consumers are paying off their mortgages faster, selecting five-year, fixed-term rates, and agreeing that real estate is a good long-term investment.”
Consumer confidence is so strong, in fact, that fewer than 10 percent of Canadians expect a housing bubble burst.
In one aspect of the report, survey participants were asked to predict changes in housing values over the next five years. While many experts expect rocky times, more than half of the consumers surveyed anticipate a fairly stable environment, with prices that are flat or increase slightly. Only a small group of respondents felt that prices would increase rapidly.
Of course, the resale housing market in 2013 differed across Canada: Nationally, sales were down by 5 percent, and only three provinces beat the 5 percent level – Alberta, with an 11.3 percent increase, New Brunswick, which dropped by 2.3 percent, and Manitoba, which experienced a 3.3 percent decline.
What’s also interesting is that older Canadians are more likely to predict stability; younger people are more wary, expecting that a housing bubble burst is a possibility.
Still, wariness is not stopping property virgins from diving into the Canadian housing market. Last year, 57 percent of home purchases were made by first-time buyers. Those buyers join the ranks of the now 9.52 million homeowners in Canada.