Attitudes about housing market vary by province, reflecting price and economic conditions
Canadian Association of Accredited Mortgage Professionals releases Spring
report on mortgage choices and consumer perceptions
VANCOUVER BC, May 14 /MY MORTGAGE BC.COM/ - Canadians overall have not changed their opinions
about the housing market. They are knowledgeable, but not influenced by the
speculation that the Canadian economy will be negatively affected by the U.S.
economic downturn, according to a report released today by the Canadian
Association of Accredited Mortgage Professionals (CAAMP). The report, authored
by CAAMP Chief Economist Will Dunning, is based on information gathered by
Maritz Research in an online survey in April 2008.
The report says that Canadians have shown themselves to be keen observers
of the fallout from the subprime mortgage meltdown in the United States. Only
11 per cent of those surveyed said they were not at all aware of the U.S.
housing crisis, down one-half compared to 22 per cent who were not aware in
the Fall of 2007. Armed with this knowledge, Canadians view their own housing
market through the lens of economic conditions and house prices in their own
communities. One-third of respondents said now was a good time to buy a house,
one-third said it was not a good time, and one-third were neutral.
In eastern Canada, Canadians feel good about the real estate market. The
most positive attitudes are in the Atlantic region, where almost one-half (49
per cent) of residents feel it is a good time to purchase a home - this is
double the percentage (24 per cent) who see it as a bad time. In western
Canada, consumers are making decisions based on rising housing prices and
deteriorating affordability. For example, 70 per cent of Saskatchewan
residents have reacted to the province's current hot housing market and felt
it was not an appropriate time to purchase a home (even higher than the 60 per
cent who held this view in the Fall of 2007).
<<
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History of Consumers' Ratings by Region for
"Is Now a Good Time or a Bad Time to Buy a New Home in Your Community?"
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Saskat- British
Rating Atlantic Quebec Ontario Manitoba chewan Alberta Columbia Canada
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Spring 2008 6.25 5.64 5.90 4.97 3.93 4.75 4.91 5.52
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Fall 2007 6.19 5.91 6.02 5.39 5.47 4.31 4.86 5.62
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Spring 2007 5.85 3.95 5.85 5.29 6.25 4.05 5.09 5.10
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Fall 2006 5.98 5.63 5.92 4.81 6.10 3.2 4.59 5.36
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Average:
Fall 2006 to
Fall 2007 6.01 5.16 5.93 5.16 5.94 3.85 4.85 5.36
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Consumers were asked to provide their answers on a 10-point scale, where
1 is a very negative response and 10 is a very positive response.
Source: Pollara survey for CIMBL, Fall 2006; Maritz survey for CAAMP,
Spring and Fall 2007, Spring 2008.
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>>
"This report indicates mortgage consumers are educated, informed, and
attuned to local market conditions," said Jim Murphy, AMP, President and CEO
of the Canadian Association of Accredited Mortgage Professionals. "Canadians
are aware of the strength of the economy and remain confident in our housing
and mortgage markets."
Canadians have yet to react to suggestions that the economy will soon
start feeling the impact of higher energy and food prices, and that Ontario is
hovering close to a recession. "Job creation in Canada is still very strong.
Moreover, the housing market doesn't respond immediately to swings in
employment; it takes people time to react to changes in personal
circumstance," said CAAMP Chief Economist Will Dunning. "Even if recent
forecasts are right and the labour market in Canada should start to weaken,
momentum from past job creation should result in continued strong housing
demand well into 2009," he added.
Alternative mortgage products, including longer amortization periods, no
down-payment mortgages, and interest-only mortgages, continue to grow in
popularity in Canada. In 2007, CAAMP found that 37 per cent of recent home
purchases had been funded with extended amortization mortgages. In the current
survey, the most positive opinions are held by people who are most likely to
be in a position to use extended amortization products - renters looking to
buy. Younger Canadians looking to become first-time home owners are most
interested in alternative mortgage products and while cautious and
conservative, they are optimistic about the overall future of these options.
"CAAMP members are committed to working with consumers to ensure they
have the mortgage solution that is affordable and best suited for their unique
needs," said Andrew Moor, AMP, Chairman of CAAMP.
In addition, the report says that the arrears rate for residential
mortgages remains close to the very low levels that have held since
mid-decade, about one quarter of a per cent. Canada has not experienced the
sharp increase in arrears and defaults that has occurred in the United States.
The mortgage market and volume of mortgages outstanding continues to
expand. Up from the 2007 year end figure of 1.5 billion, over 11 per cent
growth is forecast for 2008 for a total of 3 billion. With this growth
comes a shift in mortgage lending activity. Residential mortgages are provided
by a wide variety of lending institutions, ranging from the chartered banks to
credit unions, caisses populaires, and insurance companies, among others.
"Mortgage brokers are fast becoming a trusted source and are growing in
popularity with first time buyers and increasingly with other consumers," said
Moor. "Above one-third of mortgage transactions for new homeowners came
through brokers."
"Housing and Mortgage Market Trends in Canada" contains a wealth of
additional industry data, including regional breakdowns of survey responses,
information about Canada's employment rate, the role of job creation in
fuelling Canada's housing market, and additional insight into housing
forecasts in Canada and the United States. For a full copy of the report,
please visit: www.caamp.org.
About CAAMP
Established in 1994, the Canadian Association of Accredited Mortgage
Professionals (CAAMP), formerly the Canadian Institute of Mortgage Brokers and
Lenders (CIMBL), is Canada's national mortgage industry association. CAAMP has
assumed a leadership role in the industry it serves and has set the standard
for best practices for Canada's mortgage practitioners. In 2004, CAAMP created
the Accredited Mortgage Professional (AMP) designation as part of an ongoing
commitment to increasing the level of professionalism in Canada's mortgage
industry.
As a membership-based organization, CAAMP strives to develop its network
of professionals and to represent the interests of these individuals to
government, media and consumers. CAAMP has attracted over 11,000 members and
1,200 companies from across Canada - representing over 90% of Canada's
mortgage activity. CAAMP members make up the largest and most respected
network of mortgage professionals in the country. CAAMP's membership base
consists of mortgage lenders, brokers, insurers and other industry
participants.
CAAMP's other primary role is that of consumer advocate. On an ongoing
basis CAAMP aims to educate and inform the public about the mortgage industry.
Through its extensive membership database, CAAMP provides consumers with
access to a cross-country network of the industry's most respected and ethical
professionals.
Please visit www.mortgageconsumer.ca for more information.
In April 2008, Maritz Research conducted an online survey with 2,058
Canadians.
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