Real estate market activity has strengthened the Canadians’ confidence

Canada saw another record high level of consumer confidence, marking the third week of increases in a row. This change happened amid growing sentiment over real estate, even despite the third wave of COVID-19 cases leading to new lockdowns.

According to the survey by Nanos Research Group for Bloomberg News, two-thirds of Canadians expect home prices to keep going up. It’s the largest number since Nanos started the poll in 2008.

As you know, every week, Nanos Research polls 250 Canadians concerning their views on personal finances, job security, economic outlook and housing prices. The Bloomberg Nanos Canadian Confidence Index, based on the survey results, rose to 64.1 last week, marking another record. The index has grown by almost 8 points during the previous seven weeks. Before the pandemic, it was varying around 56%, which is also close to its historical average.

The consumer confidence level is still high even despite new restrictions, introduced in Canada recently in order to restrain a new wave of COVID-19 cases. This could be partially explained by growing optimism over real estate, as 67% of respondents believe the cost of homes in their neighborhood will go up over the next six months. Meanwhile, the average number has been 38% since 2008, and the gauge has never exceeded 60% before.

Housing prices are being pushed up by extremely low interest rates that are attracting buyers into the market. The activity rise has been so strong and unexpected that economists have started warning policy makers to take measures aimed at cooling the real estate market.

Sentiment over the economic outlook is also quite elevated, with almost 41% of respondents saying the economy will become stronger during the next six months. It’s almost the largest number since 2010.