The end-of-August results of the Bloomberg Nanos Canadian Confidence Index revealed that Canadian consumers are apparently starting to become nervous about the fundamental stability of the country’s housing markets.
In last week’s release of the poll results, Bloomberg said that worries of a decline in housing prices increased among respondents, spiking up from 12 per cent to 20.5 per cent in the week ending August 26. The survey was conducted via telephone polling (with a rolling 4-week average) of 1,000 individuals, and is considered statistically accurate within 3.1 percentage points, 19 times out of 20.
“The reading marks a change from almost unbridled consumer optimism in a housing market that has carried the Canadian economy since the 2008 global financial crisis, even as policy makers warn price gains in some cities are unsustainable,” Bloomberg noted. “Preliminary data this month from the Real Estate Board of Greater Vancouver show recent government measures to cool the market may be taking effect.”
Meanwhile, the proportion of respondents saying that their personal finances are better when compared to last year went up by 6 points to 25.8 per cent, the largest such jump since the beginning of the weekly polling.
“Canadians are cross pressured – on the one hand taking the newly changed Child Benefit but increasing concern about the value of real estate,” Nanos Research Group Chairman Nik Nanos stated.
The results came a few weeks after the B.C. government implemented a new 15 per cent tax on foreign home buyers… in a bid to improve housing affordability—a move that might lead instead to increased consumer uncertainty and a mass exodus of investors to other markets, observers warned.