Low interest rates seen as primary market driver
TORONTO, September 10, 2009 – The Royal LePage Real Estate Advisor Survey of more than 1,100 Royal LePage agents and brokers across Canada shows that 61 per cent believe the housing market’s current strength is sustainable. Canada’s resale housing market witnessed record-setting resale volumes in July prompting the Canadian Real Estate Association (CREA) to revise its housing forecast for the rest of 2009.
Affordable mortgage financing stood out as a factor driving the market as more than 64 per cent cited the low interest rate environment as the most important single factor attracting home buyers. For the Royal LePage brokers and agents who do not believe the current strength of the market is sustainable, an expectation that interest rates will rise was cited as their number one reason (36 per cent).
“The Governor of the Bank of Canada made an early year commitment to Canadians that the central bank would stand by its low interest rate policy into 2010. This principled stance has been received very positively by prospective homeowners who have felt confident in making the substantial investment that home ownership represents. Together with numerous positive economic indicators seen over the course of the summer, we believe that the current health of the real estate market is sustainable,” said Phil Soper, Chief Executive, Royal LePage Real Estate Services Ltd.
Results
Do you think the housing market’s recent performance is sustainable? (1,153 responses in total)Yes: 707 responses (61 per cent)
No: 320 responses (28 per cent)
Don’t know: 126 responses (11 per cent)
If you answered No, what do you think is the primary reason? (421 responses in total)Will end when interest rates start climbing which is imminent: 152 responses (36 per cent)
We are not adding jobs in Canada, so we are not adding buying power: 86 responses (20 per cent)
The current frenzy is due to pent-up demand which will be fully met shortly: 79 responses (19 per cent)
Canadian housing market in Canada is overvalued and overpriced – can’t last: 32 responses (8 per cent)
Other: 72 responses (17 per cent)
What factors do buyers think have contributed to the housing market’s recent performance? Ranked by first choice (1,062 responses in total)Low interest rates: 701 responses (66 per cent)
Belief that the economy is strengthening: 97 responses (9 per cent)
Release of pent-up demand: 71 responses (7 per cent)
Not wanting to miss the rally in home prices: 62 responses (6 per cent)
Perception of long-term job stability: 43 responses (4 per cent)
Positive media coverage: 34 responses (3 per cent)
Government incentives: 21 responses (2 per cent)
Other: 33 responses (3 per cent)
Why are sellers choosing to sell at this time? Ranked by first choice (1,108 responses in total)Upgrading: 369 responses (33 per cent)
Downsizing: 281 responses (25 per cent)
Relocating: 163 responses (15 per cent)
Realize a return on investment: 136 responses (12 per cent)
Retiring: 71 responses (6 per cent)
Other: 88 responses (8 per cent)
About Royal LePage
Royal LePage is Canada’s leading provider of franchise services to residential real estate brokerages, with a network approaching 14,000 real estate professionals in over 600 locations across Canada. Royal LePage is managed by Brookfield Real Estate Services, and is part of a brand family that includes Royal LePage, Johnston and Daniel, and La Capitale Real Estate Network. An affiliated company, Brookfield Real Estate Services Fund, is a TSX listed income trust, trading under the symbol “BRE.UN.”
For more information visit www.royallepage.ca.
