Julie Fortier
Province
A pair of surveys on housing prices released Wednesday show that many Canadians are worried about rising prices and interest rates, but that is not stopping many from entering the housing market sooner, or taking on more debt than they want to.
According to a new BMO survey conducted by Harris-Decima, 71 per cent of current and future homeowners think house prices are too high and 33 per cent complained they have lost sleep due to the stress of trying to buy a new home.
However, it was exactly this feeling that housing prices might spiral out of reach that has led first-time homebuyers to feel pressure to buy homes sooner, with one-third saying talk of rising house prices and rising interest rates have influenced their decision to enter the market.
The online poll of 1,000 Canadians aged 25 to 45, who are either current homeowners or are planning on purchasing their first home in the next 12 months, was conducted from Feb. 16 to 22.
“Housing prices have risen 89 per cent since 2002 — vastly outpacing family income gains,” Sal Guatieri, senior economist at BMO Capital Markets said.
Indeed, according to the Canada Real Estate Association, the average price of all homes sold through the Multiple Listings Service in February 2010 was $335,655, up 18.2 per cent from February 2009.
A separate survey by RBC showed that 64 per cent of Canadians expect mortgage rates to be even higher over the next year, with 66 per cent of mortgage holders saying they were concerned about higher rates.
While 84 per cent of mortgage holders believe they are doing an excellent or good job of paying down their mortgage, 49 per cent said their mortgage is larger that they thought it would be at this stage in their life.
The survey was conducted online by Ipsos Reid between Jan. 8 and 13.
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