Many doubt prices will keep rising: poll

Canadians who last year brushed off predictions of a real estate slowdown and kept buying houses are increasingly joining the doubters. The nation’s households are the least optimistic since May 2013 that home prices will keep rising, according to weekly polling data compiled by Nanos Research for Bloomberg. The share of survey respondents predicting higher prices fell to 31.1 per cent last week from as high as 47 per cent in July. The survey results suggest policy-maker warnings about overvalued home prices are starting to sink in, amplified by plunging prices for crude oil, the nation’s biggest export. The gloom may spell the end of a housing rally that helped pull the world’s 11th largest economy out of a 2009 recession. “Any negative changes in real estate values coupled with low oil prices could be a one-two punch for Canadian consumer sentiment,” said Nik Nanos, Ottawa-based chairman of Nanos Research Group. The Bank of Canada estimates that house prices are 10 per cent to 30 per cent overvalued. That didn’t stop sales and prices from rising through most of 2014, fuelled by low mortgage rates and a shortage of single-family housing in some markets such as Vancouver, where the average price of a detached home reached a record $1.36 million in February. The survey of real estate expectations is part of polling for the Bloomberg Nanos Canadian Confidence Index and based on phone interviews with 1,000 people. The results are accurate to within 3.1 percentage points, 19 times out of 20.