Interest rate cuts won’t be enough for most Canadians to get into the housing market, according to a recent poll.
On June 4 the Bank of Canada dropped its key interest rate by 0.25 percent from five percent to 4.75 percent. It was the first cut in four years.
Seventy-eight percent of Canadians said that owning a home is now “only for the rich” while 63 percent said they will continue to stay on the sidelines of the housing market and won’t buy or sell a home because of high interest rates.
Six percent said interest rates would need to drop by over one percent before they could consider buying a home, while 25 percent said rates would need to decline between one and 3.99 percent. Another 10 percent said rates would need to drop by four percent.
The poll also found that only 23 percent said the government was doing enough to tackle housing affordability in Canada.
Homeowners Concerned
Canadians who currently own a home are also concerned about what high rates mean for their family’s ability to keep their home, according to Ipsos. One-third (33 percent) said they were worried they would lose their home due to high mortgage rates.When it comes to renewing a mortgage, 67 percent of homeowners said they would opt for a fixed-rate mortgage while 30 percent said they would choose a variable rate.
Overall, 62 percent of Canadian homeowners say they feel financially stressed about their mortgage, while another 38 percent said they are not stressed, the Leger poll said.
The Ipsos online survey was held from June 7-10 with 1,001 participants 18 and older participating. It is accurate to within +/- 3.8 percentage points, 19 times out of 20.
Leger interviewed a group of Canadians aged 18 and older between June 7 to June 9, with 1,528 people from an online panel participating in the study.