IVANHOÉ CAMBRIDGE’S OUTLOOK

Growth forecast is moderate: CEO

Canadians are becoming less confident about the strength of the real estate market, keeping a broader gauge of consumer sentiment at almost the lowest level this year, data from weekly telephone polling show.

The share of survey respondents who said home prices in their neighbourhood will increase in the next six months fell to 31.5 per cent, from 32 per cent last week, the fourth straight drop. Another 18 per cent said prices will decline, the most since April. That pushed the Bloomberg Nanos Confidence Index to 53.2 last week, down from a prior reading of 53.3 and close to the Aug. 7 reading of 52, the low for this year.

“Real estate is a key pillar of economic confidence for many Canadians but positive sentiment on this important measure has been trending lower,” said Nanos Research Group Chairman Nik Nanos.

There’s some debate about whether Canada’s surging home prices are a sign of strength or trouble. Household debt rose to a record 164.6 per cent of disposable income in the second quarter, Statistics Canada said this month, as record low mortgage rates spur borrowing.

Improving sentiment about the prospects for the economy balanced pessimism about housing. The share of respondents who see the economy improving in the next six months rose to the highest since June 19 at 15.8 per cent, from 14.8 per cent a week earlier.

Reports last week showed monthly factory sales climbed 1.7 per cent in July and existing home sales rose by 0.3 per cent in August. They add to evidence the economy is growing again after an oil shock shrank output in the first half of the year.

“The economy may have resumed positive growth in the second half of this year, but headwinds are still strong,” Diana Petramala, an economist at Toronto-Dominion Bank, wrote in a research note.

Every week, Nanos Research asks Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed. The survey, based on phone interviews with 1,000 people, uses a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points, 19 times out of 20.