Many Canadians worried about a looming recession will be standing on the sidelines of the housing market this fall, according to new polling prepared for Re/Max Canada.
The real estate brokerage released the polling alongside its fall housing market outlook on Wednesday, which forecast a continued cooling in both prices and sales activity for most markets across the country.
Through much of 2022, economists have pointed to the Bank of Canada’s rising interest rates as dampening the country’s red-hot housing market coming out of the COVID-19 pandemic. A higher cost of borrowing has limited what buyers can afford and put a cap on the rampant price growth seen over the past two and a half years.
Re/Max’s survey, conducted by polling firm Leger, showed that cooling is expected into the fall: some 44 per cent of Canadians have temporarily shelved their homebuying aspirations due to rising rates, eclipsing the 34 per cent of prospective buyers who said higher rates wouldn’t discourage them.
But it’s not just the higher rates directly impacting housing activity: as the Bank of Canada seeks to take steam out of the economy and get inflation back under control, fears of a recession have buyers and sellers alike concerned.
Some 41 per cent of respondents to the survey said they’re putting their plans to buy or sell a home on hold over a possible recession.
Elton Ash, executive vice-president at Re/Max Canada, said in a statement that the brokerage anticipates that slowdowns in the housing market tied to economic uncertainty will be short-lived.
“Despite the fact that nearly half of Canadians are waiting to buy or sell a home, we’re confident that as economic conditions improve by mid-2023, activity will resume,” he said.
For the rest of 2022, however, Re/Max expects the average residential home price to fall by 2.2 per cent.
Six of 30 markets analyzed are expected to see modest price appreciation, however, between 1.5 and seven per cent.
Prices are expected to rise slightly in Edmonton and Calgary this fall, as well as in Moncton, N.B., St. John’s, N.L., and Halifax.
In British Columbia, sale prices are expected to drop three per cent in Metro Vancouver and 6.5 per cent in Kelowna/Central Okanagan, while holding steady in Victoria.
Cities in Ontario, outside of Oakville and Muskoka, are anticipated to either hold steady or see price declines of two to 10 per cent. Barrie is expected to see the steepest decline at 10 per cent.
The Leger poll conducted on behalf of Re/Max Canada surveyed 1,522 Canadians online between Sept. 16-18. The poll comes with a margin of error of +/- 2.5 per cent, 19 times out of 20.