Manitobans believe it’s better to buy home now than later

Ten per cent of Manitoba and Saskatchewan residents are “very likely" to buy a home within the next two years, according to a new RBC Bank survey.

The response is equal to last year’s survey result and in line with the present national average of nine per cent.

Residents of the two prairie provinces are among the most likely in Canada (59 per cent) to feel that current housing prices and economic conditions make it the ideal time to buy a house rather than wait until next year.

According to RBC’s 14th annual Homeownership Survey, 84 per cent of those who plan to buy will opt for a resale home and 51 per cent said they will be looking to purchase a home bigger than their current residence.

“Homebuying intentions in Manitoba and Saskatchewan are in step with what we’re seeing in most other regions of the country,” said Don Peard, regional vice-president of Mortgage Specialists, RBC Royal Bank. 

“But while there’s been very little change over last year, concern about rising housing prices and interest rates might partially explain why many believe it’s better to buy now than wait.”

The poll found that 63 per cent of Manitoba and Saskatchewan residents expect housing prices will be higher by this time next year and a majority (55 per cent) said they are concerned about interest rate increases in 2007.

Forty-three per cent said they expect to see mortgage rates higher in a year’s time.

Actually, this week the charter banks lowered their mortgage rates.

The RBC poll also found that an overwhelming majority of the region’s residents continue to see great value in homeownership, with 87 per cent saying that buying a house or condominium is a “good” or “very good” investment. 

On average, Manitoba and Saskatchewan homeowners estimate the value of their homes at $154,023, and estimate that the value of their home has increased 19.5 per cent over the last two years.

According to the poll, at 52 per cent, residents of Manitoba and Saskatchewan are the least likely in Canada to have a mortgage on their home, which is well below the national average of 63 per cent. Among those that do have mortgages, they have an average of $73,807 left to pay.

The possibility of mortgage rates rising in 2007 seems to be less of a concern across Canada, according to the survey. In fact, 57 per cent of Canadians believe mortgage rates will drop or stay the same, compared to 31 per cent last year.

The RBC poll also reveals that 49 per cent of Canadians are less apprehensive about interest rate increases, compared to 44 per cent in 2006.

“When we assess the consumer sentiment being expressed in this year’s study, a picture emerges of confident Canadians weighing their homebuying options in a very positive light,” said Catherine Adams, RBC’s vice-president of Home Equity Financing.

While over half of Canadians (59 per cent) believe housing prices will rise in 2007, home-buying intentions are holding steady, with three-in-10 Canadians planning to buy a house over the next two years.

The vast majority (90 per cent) think purchasing a home is a good investment, according to RBC’s poll. As well, the percentage of Canadians who estimate that the market value of their homes has increased by 50 per cent or more over the past two years, has doubled since last year’s survey (11 per cent compared to six per cent.)

“It’s clear an overwhelming majority of Canadians believe purchasing a home is a good investment,” added Adams. “In fact, the average Canadian estimates their home’s value has increased by 22 per cent in the last two years. 

“And the ‘buy now’ message is coming through loud and clear across all age groups — from 25 through to 55 plus.”

At 72 per cent, residential-detached homes continue to be the housing type of choice for most Canadians who are likely to buy a home in the next two years . Condominiums were preferred by 10 per cent, down from 12 per cent last year. Semi-detached homes were cited by seven per cent, up from four per cent in 2006. Townhouses fell to last choice, named by six per cent of Canadians planning to buy in the next two years, down from eight per cent last year.

The desire for a bigger house continues to be the most popular reason for a move, and was cited by 48 per cent of homeowners who are planning to purchase a home in the next two years. However, an increasing number are now saying they’ll be looking for a smaller home — 33 per cent compared to 20 per cent in 2006. 

Eighteen per cent responded that they’ll be considering a home about the same size as their existing house.