Faith in real estate stronger than faith in economy: poll
Compared to rest of Canada, Albertans less likely to see homes as unaffordable
Albertans are generally more confident about the prospect of the real estate market than they are about the economy, according to a new poll.
RBC recently released its Home Buying Sentiment Poll, measuring Canadian homeowners' confidence about several economic and real estate issues. Among other things, it found that when it came to the economy, Albertans were also less confident about the economy and real estate relative to other Canadians.
“Specifically, we saw that only 18 per cent of Canadians stated the overall economy was strong, yet 45 per cent believe in the strength of the housing market,” says Amit Sahasrabudhe, vice-president, home equity financing, products and acquisitions at RBC.
“In Alberta, eight per cent were confident about the economy, while 32 per cent were confident about real estate, so Albertans are a little less optimistic on both fronts.”
That comes as no surprise to realtor Lowell Martens, broker/ owner of Re/max Mountain View in Calgary.
“Albertans have been in a recession for over five years, so we are used to living in a slower economy where we have seen declining housing prices.”
Accordingly, he suggests many people have been slow to recognize the mounting strength in the housing market with prices slowly gaining upward momentum. In fact, Calgary Real Estate Board figures show, over the last few months, year-over-year gains for the benchmark home price.
“Conversely, I see the provinces where there has been high real estate (price) inflation that people still feel prices will increase more,” he says.
The RBC survey reflects this somewhat nationally with 52 per cent of respondents agreeing prices will only go up in the near future. That increases to 60 per cent in British Columbia and 56 per cent in Ontario, but it falls to 37 per cent in Alberta.
Additionally, it found COVID -19 still factors heavily into homeowners' thinking. While 78 per cent nationally are concerned about its impact on the economy, that increases to 88 per cent in Alberta. Yet the number of respondents concerned the second wave will negatively affect the housing market falls to 43 per cent nationally and 45 per cent in Alberta.
Lowell suggests Albertans' more favourable view of real estate compared with the overall economy may reflect what he's seeing in Calgary with many would-be buyers and sellers.
He notes many may be sensing home prices “are at or very close to the bottom and to wait much longer in light of today's (low) mortgage rates could be missing out on a buying opportunity.”
Recent CREB data appears to support his view — the latter half of 2020 finished strong with the highest sales figures in recent years despite the effect of the pandemic.
The survey also uncovered other responses from homeowners that likely bode well for the Calgary market.
“Alberta was perceived as one of the most affordable regions in Canada, with only 37 per cent stating that housing in their area was unaffordable, which was the second lowest value we saw from a regional perspective across Canada,” Sahasrabudhe says.
That's good news overall as demand for more space is now on the minds of many homebuyers who may decide to enter the move-up market.
Combined with a sense of the market at its bottom, buyers may be spurred into action soon, Lowell adds.
“COVID-19 has made people second-guess where they currently live, and if they're going to be housebound, they may need more room to accommodate athome workspace.”
Alberta was perceived as one of the most affordable regions in Canada.