Canadians confident on housing outlook
November 30, 2020
Continued confidence in the housing market appears a fundamental aspect of Canada’s reaction to the pandemic. This confidence is seen in consistently robust housing sales over the past few months, but also in recent consumer surveys.
About 45 per cent of respondents in a Nanos Research Group survey at the end of October 2020 said they believe the value of real estate in their neighbourhood will increase over the next six months—the highest reading since mass shutdowns were imposed mid-March to control the coronavirus outbreak.
At the same time, only 13 per cent believe values will decrease—the smallest reading over the same period.
Canada’s sales-to-new-listings ratio—a measure of market balance—is at its highest level in two decades, signalling demand vastly outweighing the supply of housing.
Continued optimism in the housing market is helping to offset growing worries elsewhere for households. Overall consumer confidence for October recorded its first monthly drop since the start of the pandemic amid signs the economic recovery is petering out. The Nanos Canadian Confidence Index ended October at 52.5, down from 53.1 at the end of September.
Canadians’ confidence appears well placed. Actual home sales activity saw a 32.1 per cent year-over-year increase in October, according to the Canadian Real Estate Association. This was a new record for the month of October by a margin of more than 14,000 transactions. For the fourth straight month, sales activity was up in almost all Canadian housing markets compared to the same month in 2019. Nationally, average home prices in 2020 are about 15 per cent higher than in 2019.
