A recent media report has pointed out that optimism about Canada’s real estate market is stronger than it has been in over six years. Bloomberg, the trusted site for business and financial market news, conducted a poll in collaboration with Nanos Research Group and discovered that the number of Canadians predicting higher home prices over the next six months rose to 47 per cent – 10 percentage points higher than April, and the highest since the survey was initiated in 2008. Apparently, Canadians are rejecting the idea of the market slowdown some experts predicted.
The Canadian Real Estate Association reported that across Canada, home prices rose 8.1 per cent during the first five months of this year. If this consumer confidence continues, we may see them climb higher. Buyers are interested in capital gains, and they are taking advantage of historically low mortgage interest rates. In 2012, we saw a temporary slowdown when the government tightened the rules for borrowing, but the market quickly recovered. When you consider stocks, Canadian lenders have proven among the best performers in the world, and they hold more than $1 trillion worth of mortgages. Within that context, over the past year, Canada’s six largest banks have ranked among the top-10 stock performers of banks across North America.
The message is clear: owning a home in Canada is still one of the best investments people can make in their financial portfolios.