One in five Canadians are hoping for a significant fall in housing prices, a sign of the mounting frustration felt by many people looking to get into the country's hot residential real estate market.
An Angus Reid survey published Wednesday shows Canadians are divided on what the future of home prices should look like, with 40 per cent hoping they rise from current levels, 39 per cent of respondents expecting a decline while 21 per cent of people polled want the status quo.
Out of those looking for prices to go down, 22 per cent said they’d like to see them fall by 30 per cent or more. That decline could have colossal ripple effects throughout an economy heavily dependent on real estate. On the other hand, 14 per cent said they would like to see a move of the same magnitude in the opposite direction.
The survey comes as record-low interest rates and work-from-home trends continue to drive Canadian home prices to record highs. Rosenberg Research Chief Economist David Rosenberg recently called the home price growth seen in Canada “one of the biggest bubbles of all time.”
Half of survey respondents said the price of a home in the city they live in is unreasonably high, while 24 per cent said they’re high but understandable given the market dynamics in their region. Frustration is palpable outside major cities, with 41 per cent of people polled living in rural or small towns who said prices are unreasonable where they live.
Over half of respondents living in the Metro Vancouver area, the GTA, Montreal and Halifax said prices were outrageously high. In Montreal, the number of residents who said so has doubled since Angus Reid asked the same question in 2016.
A lot of Canadians are also disappointed over how their federal and provincial governments handled the housing file. Roughly two-thirds of respondents said their provincial government has done a poor job on housing affordability.
There’s been growing debate over how policymakers should best respond to runaway prices. RBC Senior Economist Robert Hogue suggests they should put “everything on the table,” including eliminating the principal residence exemption from the capital gains tax.
The survey was conducted online among 5,004 Canadians who are members of the Angus Reid forum from Feb. 26 to Mar 3.