Last week’s consumer confidence rose to its highest level since January, largely on increased optimism in the real estate market.
The Canadian Consumer Confidence Index, which is compiled and released via a partnership between Bloomberg and Nanos Research, rose to 56.15 for the week ending April 24, up from 56.09 the week before.
The ranking for real estate was up to 38.50 for the week, rising above the 2015 average of 33.64 and the 2008-to-2015 average of 36.58.
“There are more indications for households to consider the worst to be behind them,” said Robert Lawrie and Peter Savvin of Bloomberg Economics. “After all, oil prices and the Canadian dollar have stopped falling, and employment and the labor force participation rate appear to be recouping some earlier losses.”
Indeed, confidence in most of the geographic regions were improved – up to 52.37 in the Atlantic provinces, from 51.77; up 13 basis points to 55.46 in Quebec; and up to 59.39 in Ontario, from 58.63 a week earlier.
Home sales and prices in Ontario, meanwhile, were up 10.1 per cent and 6.5 per cent, respectively, during the first quarter of the year, compared to the year-ago period. Consumers in that province have benefitted from low energy costs and a weak Canadian dollar, which is good for U.S. trade and manufacturing operations.
However, confidence in the Prairies fell to 52.89, from 53.08 the week prior, as home prices began to follow a decline that was led by property sales earlier this year.
In Alberta, where the oil shock has mainly been felt, home sales were down 24.4 per cent during the first quarter of the year, compared to the year-ago period. Prices, too, have begun to decline, sinking 2.3 per cent during the first three months of the year.
In British Columbia, confidence also fell to 57.65 from 59.11 a week earlier. That decline was likely driven by an increasingly unaffordable housing market, particularly in Vancouver, where the average price of a detached property is well above the $1-million mark.
Written by Olivia D'Orazio