Canadians confident about home ownership: survey
TORONTO (Reuters) - Canadians are not only confident that they are assiduously paying down their mortgages, but they also believe they have the means necessary to weather a drop in house prices, contrary to worries that household debt is out of control, a poll showed on Wednesday.
Almost three-quarters of Canadians, or 73 percent, believe that they or their families are well-positioned in the event of tumbling home prices, according to the annual RBC Homeownership Study undertaken by Royal Bank of Canada.
The poll found that 85 percent of respondents feel that they are doing a good or excellent job of paying down their mortgage, while 90 percent of Canadians are confident that real estate in Canada is a good investment.
"There's been a lot of noise around debt-to-income ratios," said Marcia Moffat, RBC head of home equity financing, noting that she found it comforting that such a large segment of Canadians said they were able to handle what is typically the biggest purchase of an individual's life.
She said confidence was drawn from stable employment and rising incomes.
The survey was released a week after the Bank of Canada left its benchmark interest rate unchanged at a low 1 percent.
The central bank and other policymakers have flagged personal debt as a danger to the economy, although the Bank of Canada last week said household debt was less of a concern than it has been in past months. Consumer spending remains strong but is easing to levels more in line with incomes, the bank said.
Worries about personal debt have twice prompted the government to introduce stricter mortgage rules to prevent overheating in the housing market.
The survey showed that Canadians, supported by a strong banking system, still have a strong interest in purchasing a home over the next two years. Interest declined slightly in the quarter, but remains high overall with 29 percent saying it's likely they will buy. Continued...