A TNS Vibe survey released today by TNS Canadian Facts – a marketing, opinion and social research organization – suggests that intentions among Canadians to buy a house or condo have risen to 14% from 11% last September. The survey, which interviewed more than 1,000 Canadians online between March 18 and 25, 2010, also shows that despite those who indicated their intentions to buy six months ago, nearly two thirds have still not purchased a home.
The recent recession and job insecurity fuelled concern among Canadians that they might not be able to make their mortgage payments. Vestiges of that insecurity still linger. Of those surveyed who have a mortgage on their principal residence, 42% say that they tried to make cutbacks on their mortgages.
However, only one in five surveyed say that they hope to make further cuts to their mortgages in the future. These findings seem to support another survey released on April 26 by the Canada Mortgage and Housing Corporation. More than two-thirds of recent homebuyers interviewed in the CMHC survey say that there is a strong chance that they will pay off their mortgages early; almost 30% indicated that they have already made lump sum payments or increased their regular payments to pay down their mortgages.
Both surveys seem to support signs that consumer confidence in Canada is rising.
In the TNS news release issued today, research director Brook Tyler is quoted as saying, “Attractive interest rates, coupled with a more sanguine view of the economy, suggest that consumers are more ready to act. Indeed, 12% of Canadian renters report that they are more likely to take out a mortgage in the near future to take advantage of current rates, and more than one in five (22%) of mortgage holders are planning to renew early or renegotiate to take advantage of current rates.”
It’s notable that the TNS Vibe survey was conducted prior to the introduction of new mortgage rules and hikes in interest rates by Canada’s major lenders. It leads us to wonder if rising consumer confidence – not rising interest rates – will be the big story in the housing market in the coming months. Confidence among those still sitting on the fence might just sustain current home buying activity longer than some pundits predict.