A majority of Canadian home owners expect they will have no difficulty in making their mortgage payments, according to a new homeownership survey from Mortgage Professionals Canada (MPC).
Rapidly Evolving Expectations in the Housing Industry, written by MPC Chief Economist Will Dunning, is the first report in a series of consumer surveys tracking the evolving effects of COVID-19 on Canadian homeownership sentiment. This report uses data from a survey of 1,046 Canadians, conducted between June 29 and July 13.
Findings show that COVID-19 has not severely impacted most current home owners with respect to their employment situation. Many are only expecting a short-term change in employment. The vast majority have also expressed comfort with current mortgage debt and remain pleased with the decision to purchase a home.
“What we have seen clearly is that the vast majority of home owners are not feeling a long-term financial impact related to COVID-19, and that potential home buyers are still very much in the market for a home, signs of which are being seen in regions across the country,” said Paul Taylor, president and CEO of MPC. “To this point, the greatest economic effects of COVID-19 have been experienced by young age groups and people in lower-wage occupations. In consequence, the housing market impacts will likely be greater in the rental sector than for homeownership.”
MPC intends to conduct the same survey in six-week increments, three more times, to track any shifts in Canadians’ expectations about the housing market as the pandemic evolves, economies reopen and mortgage deferral programs expire.
“One of the reasons we look at economic trends is that, most of the time, the recent past gives us reasonably reliable clues about what might happen in the near future,” added Dunning. “That is not the case in these extremely abnormal times as the COVID-19 emergency has resulted in extremely volatile shifts in the Canadian housing market.”
Expectations about buying homes
COVID-19 hasn’t dampened expectations about buying a home in the near future. In fact, responses show a heightened desire to buy a home or condominium. Among non-homeowners, the expectation of buying in the next year has doubled, from seven per cent at the end of last year to the current 14 per cent.
While this could reflect the sharp reductions in mortgage interest rates, as well as desires to move to locations where social distancing is easier, an increased desire to buy homes won’t necessarily result in more actual purchases. The survey also indicates this interest to buy is only partially due to COVID-19.