Significantly fewer Canadians intend to buy a home within the next two years, according to RBC Royal Bank’s latest homeownership survey.

Overall intentions to purchase a home have dropped by five percentage points to 23%. The intensity to buy has also decreased with those very likely to buy slipping from 9% in 2007 to 7% in 2008, the lowest level since the survey was started 15 years ago.

While the number of Canadians who would “buy now”, rather than wait until next year is still strong at 52%, it has dipped from 58% in 2007, suggesting a potential slowdown in the housing market. Similarly, although the majority of Canadians (85%) continue to believe purchasing a home is a good investment, the proportion is down from 90% in 2007, but still much stronger than it was 10 years ago (76%).

“Considering the flurry of activity we’ve seen over the last few years, this year’s results definitely signal a change,” said Catherine Adams, RBC Royal Bank’s vp, home equity financing.

The weaker outlook is also evident in the number of Canadians who expect housing prices to rise (56%), which is down three percentage points from last year (59%).

Fewer Canadians also believe mortgage rates will stay the same in 2008. While the majority of respondents (46%) believe mortgage rates will be higher (versus 43% last year), some are a little more optimistic as 23% feel rates will be lower — an increase of seven percentage points from 2007.

“Despite all the concerns we’ve heard about the U.S. housing market, Canadians do not appear to be heading towards a housing crunch,” added Ms. Adams.

On a regional basis, purchase intentions are down across the country, except in Quebec, where those likely to buy a home within the next two years increased to 21% from 19%. Looking at those respondents who are very likely to buy home, Saskatchewan and Manitoba lead at 9%, Alberta at 8% with British Columbia, Ontario, and Quebec at 7% and Atlantic Canada at 5%.