Housing optimism is back in Canada, boosting consumer confidence
As the real estate outlook steadily improves and the economy continues to grow with few signs of an impending recession, Canadians are becoming more optimistic.
The Bloomberg Nanos Canadian Confidence Index, a gauge of sentiment based on weekly polling, increased to its highest point since June. Last week, the index reached 50 points, marking the fifth straight gain. Early in March, when the Bank of Canada officially stopped raising interest rates, it started to rise sharply.
Positive and negative opinions are roughly equal, according to a Bloomberg Nanos score of 50. The index fell to 42 in October, its lowest point in the previous year.
The belief that home prices have reached their lowest point is the main driver of the gains; 75% of respondents predicted that prices will either increase or remain stable in the upcoming six months. It’s also the quickest 10-week increase in more than two years, and it’s the highest percentage since last June.
The survey results are indicative of market trends. The first monthly increase in a year, the national benchmark price for a home increased by 0 point 2 percent to $709,000 in March.
Additionally, the Bank of Canada made a conditional commitment in January to maintain its benchmark rate at 4.5 percent if the economy and inflation develop as expected. Concerns regarding the health of some U. S. Additionally, regional banks have altered the outlook for interest rates. Additionally, analysts predict that the housing market will improve in the second half of 2023 as a result of a lack of housing supply, a prediction echoed by the central bank in its most recent monetary policy report.
Compared to four weeks ago, Canadians are also feeling more optimistic about their own financial situation and job security. Following a stronger-than-expected first quarter, the central bank and the majority of economists have upgraded their predictions for economic growth in 2023.
250 Canadians are surveyed weekly by Nanos Research to get their opinions on personal finances, job security, the economy, and home prices. The 1,000 phone responses are published by Bloomberg as four-week rolling averages.