Canadians show stronger optimism about housing, raising consumer confidence

The latest poll shows that Canadians are feeling more optimistic as the forecast for housing keeps improving and the economy is slowing down with not so many signs of a possible recession.

The Bloomberg Nanos Canadian Confidence Index went up to its highest level since June 2022. The index was at 50.4 last week, marking the fifth gain in a row. It started growing rapidly when the central bank paused its rate hike cycle at the beginning of March.

A Bloomberg Nanos index of 50 means that positive and negative views are almost the same. Its lowest level during the previous year was 42 reported in October.

The main reason for the increases is an opinion that real estate prices have reached their bottom: 75% of respondents expect prices to go up or remain unchanged over the next six months. It’s the highest level since June 2022 and the fastest 10-week hike in more than two years.

The survey reflects the market’s changes. The national benchmark home price rose by 0.2% to $709,000 in March, marking the first monthly gain in a year.

In addition to it, the Bank of Canada promised in January to keep its key lending rate at 4.5% in case the economic outlook and inflation are in line with its forecasts. Worries about the health of certain U.S. regional banks have also affected the outlook for interest rates. And a lack of housing supply has made analysts believe housing will rebound in the second half of this year. By the way, the BoC shares this opinion in its latest report.

Moreover, Canadians are also feeling more optimistic about their job security and personal finances, compared with four weeks ago. The BoC and most economists raised their forecasts for economic growth in 2023 after the first quarter showed better-than-expected results.

Every week, Nanos Research surveys 250 Canadians on their opinions about personal finances, job security, the economy, and housing prices. Bloomberg releases four-week average results of the 1,000 telephone responses.