Posthaste: Canadians are getting sick of waiting on sidelines for housing market to improve
Fewer people say they’ll home out for home prices and interest rates to drop before jumping back into the market
A growing number of Canadians appear to be getting fed up with waiting on the sidelines for the housing market to improve.
Just 20 per cent of potential homebuyers say they’ll wait for prices to drop before making a move to enter the market, and only 21 per cent intend to wait for interest rate cuts, according to Dye & Durham Ltd.’s new consumer trends research for the fourth quarter of 2023.
Those numbers mark a decrease from the third quarter, when 24 per cent said they’d hold off on buying a house until prices came down and 23 per cent said they’d wait for rates to fall.
“It appears that many prospective homebuyers are growing tired of trying to time the market,” Martha Vallance, chief operating officer at Dye & Durham, said in a release.
Homeowners are also warming up to the idea of listing their properties for sale and buying a new one sometime this year. The number planning to sell has ticked up to 12 per cent in the fourth quarter from 10 per cent in Q3.
Even renters who had abandoned buying a home are starting to come around, the research showed, with eight per cent planning to look for a home in the next 12 months, compared to six per cent in the third quarter.
“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,” Vallance said.
Still, most people don’t expect home ownership to grow more affordable this year. Over half think home prices will rise, with 16 per cent expecting big hikes. They’re not very hopeful mortgage rates will come down, either, and only 19 per cent expect decreases this year.
Many also don’t feel that great about their personal finances heading into 2024. Forty-four per cent think they’re worse off financially, up from 39 per cent in the third quarter, the survey said. A good number are also preparing to pay even more than they did last year for essentials such as food, gas, insurance and rent.
The gloomy outlook extends to the economy. A majority say they’re gearing up for a recession, and 59 per cent expect one to hit in the next 12 months, up from 54 per cent in the third quarter. Another 31 per cent think a recession is already here.
Canada’s annualized rate of inflation rose to 3.4 per cent in December, Statistics Canada said Tuesday, faster than the 3.1 per cent increase recorded in the previous month.
The increase in the headline inflation figure, a change anticipated by economists, was largely due to a year-over-year rise in gasoline prices, which were 1.4 per cent higher than in December 2022, even though monthly gas prices fell for the fourth month in a row, Statistics Canada said. In November, by contrast, gas prices had declined by 7.7 per cent year over year.
Excluding gasoline, the rate of CPI growth slowed year over year to 3.5 per cent in December from 3.6 per cent in November, but remains above the Bank of Canada’s target.