Safe as houses?

par Andrew Rickard | September 15 2016 01:30PM

A survey conducted by Manulife Financial shows that an increasing number of Canadians do not believe it is a good time to invest in their homes.

Manulife's Investor Sentiment Index gauges how Canadians feel about a range of asset classes. The most recent survey shows that confidence in the value of one's own home as an asset dropped four points in the last six months and has been falling steadily since May 2014, down by 9 points in total. Although 80% of those surveyed still said that owning a home was their primary goal, only 25% plan to buy a home in the next 12 months.

23% said it was not a good time

Respondents were divided on the question of whether or not it is the right moment to purchase a home: 23% said it was not a good time while 35% were still in favour of buying. Asked about their reasoning (respondents could give more than one answer), most were concerned about affordability (cited by 72%), volatility in the real estate market (32%), and were anxious about their own financial situation (20%). Those who said it was still a good time to buy noted that mortgage rates are low (71%), and felt it was a secure investment (45%).

A top priority for Canadians

“Canadians say that owning a house is a top priority for them, yet they’re not willing to invest in housing right now,” says Kevin Headland, senior investment strategist at Manulife Investments. “Perhaps investors are feeling the timing for this investment isn’t right. Many real estate markets are red-hot right now, which makes it difficult for Canadians to purchase a home, even if it is a priority for them. There are concerns that this housing bubble might just burst, leaving them with a bad investment.”

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