Canadians are divided over what they want to see with the housing market.
The Angus Reid Institute found in a recent survey that 39 percent are hoping for prices to fall over the next few years.
Out of this 39 percent, 17 percent want to see prices tumble around 10 percent.
Meanwhile, a larger proportion of 22 percent would like to see home prices drop by an “astounding” 30 percent or more.
“Notwithstanding the staggering knock-on effects of a housing crash of such magnitude on almost every other aspect of the Canadian economy, it is an undeniable indicator of the amount of housing pain people in this country are experiencing coast to coast, in large communities and small,” the polling institute stated in a report Wednesday (April 7).
In its survey of 5,004 Canadian adults, the Angus Reid Institute also found that 21 percent of respondents want to see prices remain where they are.
As for the remaining 40 percent of respondents, they want to see prices increase over the next few years.
Out of the 40 percent, 26 percent would like to see prices increase around 10 percent.
The remaining 14 percent want a higher price increase of 30 percent or more.
In its report, the Angus Reid Institute recalled that the Canada Mortgage and Housing Corporation in May 2020 predicted an 18 percent drop in home prices because of the COVID-19 pandemic.
The opposite happened.
“Contrary to this forecast, housing prices have continued to rise and break records, driven by the relative endurance of higher-income households through the pandemic, low-mortgage rates, and copious spending by federal and provincial governments,” the institute explained.
The nonprofit also noted that the national average home price reached a “record” $678,091 in February 2021.
This price represents a year-over-year increase of 25 percent.
Moreover, prices are expected to rise more than 16 percent again this year.
On a regional level, the Angus Reid Institute reported that nearly half of B.C. and Ontario residents “want market to tank”.
In B.C., 28 percent want prices to crash by 30 percent or more, and another 17 percent want prices reduced by around 10 percent.
It’s the same in Ontario: 28 percent want prices down by 30 percent or more, and 17 percent want prices slashed by around 10 percent.
“Regionally, it is those dealing with the highest home prices in the country that are most likely to want a massive reduction in prices,” the institute reported.
The nonprofit also reported that at least 56 percent of residents in Metro Vancouver, the Greater Toronto Area, Montreal, and Halifax said that housing prices in their city are “unreasonably high”.
In its report, the Angus Reid Institute also mentioned a “housing bubble”.
“Canada’s housing bubble puts much of the country in a precarious situation,” the nonprofit stated.
If housing prices fall “considerably”, the institute noted, this would “portend enormous challenges”.
To illustrate, the Angus Reid Institute provided a graph showing that residential investment as a part of gross domestic product increased from below six percent in the first quarter of 1980 to nearly 10 percent in the first quarter of 2020.
More details here.