Canadians are increasingly worried about the real estate market, according to a Manulife survey published Wednesday, which found that nearly three-quarters of respondents believe housing in the country is unaffordable.
Eighty per cent of those polled in the survey conducted by Environics Research in May said owning a home was their primary goal, but only a quarter said they plan to buy one within the next year.
"Canadians say that owning a house is a top priority for them, yet they're not willing to invest in housing right now," Kevin Headland, senior investment strategist of Manulife Investments, said in a release.
The majority of those who said they believed it was a good time to buy said it was due to low interest rates (71 per cent). On the other hand, 72 per cent of those who said it wasn’t an appropriate time to purchase a home cited affordability as the top reason.
"Perhaps investors are feeling the timing for this investment isn't right,” Headland said. “Many real estate markets are red-hot right now, which makes it difficult for Canadians to purchase a home, even if it is a priority for them. There are concerns that this housing bubble might just burst, leaving them with a bad investment."
Not surprisingly, the least optimistic investors were from British Columbia, where only 23 per cent said it was a good time to buy a home.
Vancouver home prices rose 1.7 per cent in August, the 20th month without a decline, according to the Teranet-National Bank Composite House Price Index. The increase comes even after the British Columbia government implemented a 15-per-cent tax last month on foreign buyers in attempt to cool Vancouver’s hot real estate market.
The survey found that the most optimistic investors came from Atlantic Canada, where almost half said it was a good time to buy a home.
The data from Manulife’s report is based on an online survey of 1,500 respondents who were at least 25 years old.