Is Home Ownership a good investment?
The Royal Bank of Canada’s 18th Annual Home Ownership Study indicates that:
- 90% of Canadians “are confident about real estate in Canada as an investment.”
- “85 per cent feel that they are doing a good or excellent job of paying down their mortgage”,
- 73% “believe that they or their family are well-positioned to weather a housing drop.,” and
- 40% “feel the current housing market is balanced equally between buyers and sellers, a rise of five points over 2010.”
A Healthy 6.96% of Consumers Plan to Buy within 12 Months
Compared to 2010, the study does show a 2-point drop in interest in buying. Overall, however, it remains high as “29% say its likely they will buy” over the next two years. Among those likely to buy, 24% percent say they plan to buy over the next year. This indicates that approximately 6.96% of consumers overall will be looking to buy over the next 12 months, a healthy indicator.
Canadians Believe in Value of Ownership
"Canadians believe in the long-term benefits of owning a home including the value it can provide, both personally and as a long term investment," said Marcia Moffat, RBC head of home equity financing. "Last year's survey showed that people were looking to buy ahead of rising costs. This year marks a return to more normal levels of purchase intentions and recent housing data reflects this move to a more balanced market."
So what are the major concerns about buying a home?
A little over one quarter list rising home prices as their number one concern and about 22% quote rising mortgage rates.
How have home prices faired over the last two years?
- 7 in 10 Canadians feel their home increased in value,
- 20% believe their price has stayed the same and
- 10% think their home’s worth decreased.
Where do Ontarians Sit in All of This?
46% of Ontarians feel that the market is currently balanced, the highest percentage in the country. As well, only 28% of Ontarians plan to buy within the next two years. Of those intending to buy, 80% plan to buy within the next 12 to 24 months, again the highest in the country. According to Patrick Tremblay, VP Mortgage Specialists, Ontario, Royal Bank of Canada, “Ontario’s housing market has experienced quite a bit of volatility over the past two years so buyers are being a little more cautious.”