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How do Canadians Feel About the Canadian Mortgage Market?

21 January 2013

The Canadian Association of Accredited Mortgage Professionals (CAAMP) recently released their report, Highlights from CAAMP’s Fall 2012 Consumer and Industry Surveys, a report focused on the Canadian mortgage market, and how the individuals within it feel about it. The results were very interesting as they show that for the most part, there’s a certain disconnect between how Canadians feel about their own situation, and how they feel about the housing and mortgage market in general.

This is most evident by the results shown from one survey, asking Canadians how they felt about their personal situation versus what’s going on in the rest of the country right now. As you can see from the chart below, Canadians feel fairly good about their own situations, including how much home equity they held, and their own finances in general. 83 per cent are happy with the loan-to-value ratios on their mortgages, while a surprising 80 per cent say that they could afford a $200 increase in mortgage payments. Nearly three-quarters of Canadians are happy with the size of their mortgage and most of them – 70 per cent – feel that if the housing market were to experience a huge downturn, they’d be able to handle it fairly well.

However, Canadians aren’t nearly as confident about the situation of other Canadians as they are their own. This is clear from the chart below, which shows that Canadians think that 77 per cent of fellow Canucks cannot afford the home they purchased. That’s interesting considering that the chart above shows that 74 per cent of people are happy with their mortgage. Comparing charts side by side, there’s an obvious disconnect. Therefore, it shouldn’t be surprising to know that 89 per cent of the people surveyed agreed that Canadians currently have too much debt.

At first, it may not seem surprising that 60 per cent of Canadians think we’re in a housing bubble. After all, there’s been talk of that same bubble bursting for the past couple of years; and great debate has raged on as to whether or not the bubble was a reality, or a needless fear of Canadians. But what might be surprising about only 60 per cent of Canadians being under the impression we’re in a housing bubble is that, as you can see from the chart below, 76 per cent of Canadians think that home prices are going to continue rising.

That’s not as high as it was in the last half of 2o11, but it hasn’t dropped below 50 per cent since 2009, the height of the crisis. Because of this expectation, it may also not be surprising to know that many Canadians don’t think that now is a good time to purchase real estate. While 88 per cent of those in the industry, including CAAMP and mortgage brokers, believe that now is a good time to buy, only 61 per cent of consumers do. And that’s a number that’s also been steadily dropping over the past couple of years.

What are your thoughts about the Canadian mortgage and housing market? Do you think now’s a good time to buy? And what are your thoughts about your own situation versus that of your neighbour? Do you think now is the time for all of us to tighten the reins and maybe put off the purchase of that new home? Or do you think we’re doing fairly well, and that all, or at least most of us, will survive a downturn in housing?

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