'Low interest rates are a saving grace' for millennials to buy homes: Scotiabank's Webster
Lower interest rates have become a motivating factor for young Canadians to get into housing market, according to a report by Scotiabank published Thursday.
Despite the global pandemic, nearly one-in-five (18 per cent) Canadians between the ages of 18 to 34 said their plans to buy a home have been accelerated.
The survey points to lower interest rates as the driving factor behind millennials’ growing optimism around achieving their housing dreams.
Scotiabank also found one-quarter of Canadians believe home prices will come down in the next year, but that the younger cohort was the most optimistic group. Thirty-six of respondents aged 18-24 think there will be a price drop compared to 24 per cent of those between the ages of 35-54 and 17 per cent of those over 55.
In July, Bank of Canada Governor Tiff Macklem assured Canadians that the historic low interest rate environment won’t be changing anytime soon. He reiterated that pledge in central bank’s latest decision earlier this month, forecasting rates could stay put until at least 2023.
“Our message to Canadians is that interest rates are very low and they’re going to be there for a long time,” Macklem told reporters in July.
“If you’ve got a mortgage of if you’re considering making a major purchase, or you’re a business and you’re considering making an investment, you can be confident rates will be low for a long time.”
The Scotiabank housing poll was conducted by Maru Blue on August 24, and surveyed a randomized sample of 1,509 respondents across Canada.