Canadians bursting with confidence because they have faith in their housing market

Canadians are searching past signs of damage from low energy prices and predicting the housing surge will continue.

According to weekly polling by Nanos Research, the share of respondents expecting higher real estate prices reached probably the most since December 2014 last week, or 38.7 per cent. That pushed the Bloomberg Nanos Consumer Confidence Index to 54.7 a week ago, the greatest this year, from 54.5 previously.

“The primary positive driver for the forward look on the economy was the vista the value of property would increase,” said Nik Nanos, chairman at Ottawa-based Nanos Research Group.

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The average national home sale price exceeded $500,000 the very first time ever, with Vancouver and Toronto leading gains, Canada’s main realtor group reported on March 15. Policy makers have highlighted other positive forces that will lead the economy out of the slump caused by the collapse in oil prices. They incorporate a lower currency, which should help exporters, and a federal budget recently that promises about $120 billion in deficit spending within the next six years to buttress the economy.



There’s some evidence things are turning around. Canada’s gdp grew 0.6 percent in January, the fastest since July 2013. And also the country’s trade deficit was narrower than forecast in January as exports of automobile and parts posted a 12-month gain of 39 percent.

Lingering Risks

Still, you will find lingering risks. Housing gains have prompted warnings lovers are swimming in debt that might be difficult to afford when rates of interest climb from today’s historical lows. Finance Minister Bill Morneau tightened mortgage lending rules last year on worry about strains within the Vancouver and Toronto housing markets. The Nanos polling shows just 17.4 per cent of those asked see home values declining in six months.

“Recent events C the budget, better-than-expected GDP growth, the rebound within the Canadian dollar, and increases in housing starts and house prices C should be viewed poor a turnaround of the oil rally and wage growth that has dropped sharply because the middle of 2014,” said Robert Lawrie of Bloomberg Economics.

The Nanos data showed a divide between provinces that depend on manufacturing for example Ontario and Quebec versus the harder-hit Prairie region including oil hub Alberta, where home sales and costs have slid in certain markets. Consumer sentiment in Ontario, Canada’s most-populous province, rose to 59.5, the greatest since November. On the Prairies it declined to 41.8, near to a record low.

Other areas of the report also indicated an uneven recovery. The 8.5 percent of respondents who said their tasks are “not at all secure” was the highest since June.

The share of people who said the economy could be stronger in 6 months rose towards the most since December at 24.7 per cent. That helped narrow the space with the 33.1 percent who said hello could be weaker.

The Bloomberg Nanos Consumer Confidence Index is based on a four-week rolling average of just one,000 respondents to telephone polling. It’s considered accurate within 3.1 percentage points, 19 times from 20. The most recent round of polling ended March 24.

Bloomberg.com