Much of the pent-up demand driving market is fulfilled
Province
TORONTO — In a possible sign of a housing market cool-down, a recent survey suggests fewer Canadians are “very likely” to buy in the near future amid high prices and rising interest rates.
The Royal Bank survey of buying intentions over the next two years found the share of those people saying they were very likely to buy had dropped to 10 per cent — down from 13 per cent last year and at the lowest point in more than five years.
The percentage of those who plan to buy a home in the next six months also fell — to eight per cent, down from 10 per cent last year.
Catherine Adams, RBC Royal Bank’s vice-president for home equity financing, said the decline appears to be the result of higher interest rates, rising home prices and the fulfilment of much of the pent-up demand driving the market.
“It definitely is a signal of change — this engine is not just continuing on at the same pace as it was in the past,” Adams said.
Royal Bank said the only part of the country likely to see an increase is Atlantic Canada, where those “very likely to purchase” in the poll increased to 14 per cent, from eight per cent last year.
Royal LePage Real Estate Services Ltd. agrees that home sales are forecast to slow between three and five per cent in 2006, but the year would still be the second-best on record, the firm said.
© The Vancouver Province 2006
