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Posthaste: Canadians could be gearing up to enter the housing market again Back to video

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Some Canadians who’ve been sitting on the sidelines of the housing market in the face of high prices and interest rates might be getting ready to jump back in, new research suggests.

Home-buying intentions appear to be rising, according to the latest consumer pulse report released this morning from Dye & Durham Corp. The survey of 1,001 Canadians found that one in 10 are looking to sell their home and buy something new within the next 12 months. That’s double the number of those who sold and bought a new house in the past year, Dye & Durham said.

First-time homebuyers’ intentions have also increased, with eight per cent intending to make the leap within the next year, compared to four per cent who already purchased their first house this past year. The number of people planning to buy an investment property or vacation home is also up to eight per cent, compared to four per cent who’ve pulled the trigger in the last 12 months.

That’s not to say Canadians aren’t worried about high interest rates. Indeed, 23 per cent said they’d stay on the housing market sidelines until rates fall. Many continue to remain concerned about prices, too, with 24 per cent saying they wouldn’t buy until home prices decline. But as the Bank of Canada signals an end to months of aggressive interest rate hikes, Dye & Durham predicts “brighter days” ahead for the housing market.

“As rates begin to hold — and eventually decline — we expect to see a significant upswing in areas like real estate transactions,” Martha Vallance, chief operating officer of Dye & Durham, said.

Still, high interest rates are squeezing Canadians’ wallets. Most people report having to spend more on groceries, gas and car and home insurance in the past year, and piggy banks are getting hit. More than half of those surveyed say they’ve had to quit allocating money to personal savings, while 45 per cent have abandoned emergency savings. Retirement savings are also being put on ice, with 35 per cent saying they’ve had to stop contributing to their registered retirement savings plans (RRSPs). Thirty-nine per cent also say they’re worse off financially this year than last.

“It’s clear that many Canadians have been feeling pinched by this high interest rate environment and have seen their purchasing power throttled over the past year,” Vallance said.

That could be contributing to an overall sense of pessimism about the Canadian economy. The survey said more than half expect the country to enter a recession in 2023, while 32 per cent think we’re already in one.

Economists appear to be much more optimistic, however, and think Canada will likely avoid a recession, according to Bloomberg’s latest economist survey. The economy is expected to grow 0.3 per cent in the last part of this year — higher than the zero growth predicted in the August survey. And things will only pick up from there, economists say, with growth building in 2024.

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Florida has overtaken New York to become the second most-valuable United States housing market, according to a new study by Zillow.

The total value of U.S. housing rose more than US$2.6 trillion in the past year, Zillow said, defying predictions that higher borrowing costs would lead to a prolonged slump. Low levels of supply, enhanced by the lock-in effect — which has left current mortgage borrowers reluctant to give up their low-cost loans — have pushed nationwide prices to a new high.

The gains haven’t been evenly spread across the country. In California, which contains about one-fifth of the U.S. housing market, prices have declined since June 2022. But in Florida, the value of residential property has risen US$160 billion in that period — pushing the Sunshine State ahead of New York in the national rankings.

Read the full story here.

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Fall approaches, but columnist Peter Hodson has a case of the summer foggies. It turns out, that’s to our benefit as he offers five interesting takes on what’s been happening in the market. Among them, he says special purpose acquisition vehicles are dead and he has a way for the Bank of Canada to cure inflation.

Today’s Posthaste was written by Victoria Wells, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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