As home prices march higher and interest rates rise, homebuyer sentiment in Canada is plummeting, a new survey has found.

Only 29 per cent of respondents think now is a good time to buy a home – a drastic decline from 50 per cent of respondents who thought the same last year, according to a new survey conducted by Oxford Economics on behalf of Mortgage Professionals Canada. The survey collected data from more than 2,000 Canadians.

“This is the lowest share ever recorded in the history of our survey,” said Paul Taylor, president and chief executive officer of Mortgage Professionals Canada, in a release Wednesday.

Despite souring sentiment though, most Canadians expect home prices will rise further. Fifty-six per cent of respondents said they expect an increase of any magnitude, while 26 per cent said they expected home prices to jump significantly.

The data also showed Canadians gave an average score of 7.1 out of 10 on whether owning real estate was a good long-term investment.

In the latest Canadian Real Estate Association data, benchmark home prices posted a record month-over-month jump of 3.5 per cent in February. Prices were up nearly 30 per cent on an annualized basis.

Some economists believe rising interest rates will dampen runaway price growth on the margins, but overall, they generally don’t think it will won’t do much to improve affordability since most buyers are facing higher mortgage rates.

The report also found as home prices rose, buyers increased the size of their down payments. The survey showed people paid an average of $647,036 for a home over the past two years, and their average down payment was $297,467, or 46 per cent of the purchase price. In the previous survey, down payments averaged a third of the home price.

The report said for the most part, buyers’ down payments came from personal savings. Only 16.7 per cent relied on a financial gift or loan from family members.

As the Canadian economy re-opens from pandemic restrictions, the report said it expects disposable income and savings will be reduced as money is redirected towards consumption – which could impact some homeowners’ ability to handle rising mortgage payments.

Just six per cent of respondents said they were already struggling to make their payments, according to the survey, while 23 per cent wouldn’t be able to manage a small increase in their payments.