Although 80% of Canadians declare owning a home to be a primary goal, only 25% who currently rent say they intend to actually buy one within the next year, according to Toronto-based Manulife Financial Corp.’s latest investor sentiment index.
“Perhaps investors are feeling the timing for this investment isn’t right. Many real estate markets are red-hot right now, which makes it difficult for Canadians to purchase a home, even if it is a priority for them,” says Kevin Headland, senior investment strategist with Manulife Investments, in a statement on Thursday. “There are concerns that this housing bubble might just burst, leaving them with a bad investment.”
The firm’s semi-annual investor sentiment index collects survey participants’ views on a range of asset classes. The most recent edition, released on Thursday, focuses on Canadians’ thoughts on real estate.
The report finds that Canadians’ enthusiasm toward investing in their own home continues to decline and has been doing so since the spring of 2014. Manulife’s definition of investing in a home as an asset class includes the purchase of a home, paying off a mortgage or investing in renovations.
Close to one-quarter (23%) of survey participants say it’s not a good time to buy a home. Of those who feel this way, 72% say it’s because housing is unaffordable; 32% believe the real estate market is volatile; and 20% are not confident in their personal or financial situations.
However, not everyone is negative about the prospect of buying property, with 35% believing the house-buying environment is a good one. Of this group, 71% cites low mortgage rates as the reason for this while 45% feel a home purchase is a secure investment.
The survey also finds that Canadians’ intention to remain in their own homes in retirement can change dramatically once they reach that life stage. Although only 6% of Canadians, overall, believe they will sell their homes and rent when they retire, 73% of those who are currently 65 years old or older say they will do just that.
Environics Research conducted the survey for Manulife in May. The findings are based on the responses from a general population pool of 1,500 Canadians who are at least 25 years old and an affluent pool of 1,251 survey participants who are household financial decision-makers and at least 25 years old with household income of $75,000 and investible assets of at least $100,000.
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