Consumer confidence rose by 4 points in April over the previous month, according to the Conference Board of Canada consumer confidence index. It also revealed a sharp shift in Canadians' attitudes toward making major purchases such as homes, appliances and automobiles.
For the first time in almost a year, survey respondents who think now is a good time to make a major purchase outnumber those who don’t. While results vary by province, news reports on the index highlight that Canadians overall seem to be more positive about job prospects and financial security.
As consumer confidence goes up – more good news for prospective home buyers is that prices appear to be levelling off in several real estate markets. The Taranet - National Bank of Canada House Price Index is a composite index of housing prices in six metropolitan areas – Halifax, Montreal, Ottawa, Toronto, Calgary and Vancouver. In February, it showed a modest 0.08 overall rise in repeat sale prices over the previous month, with prices going up in some markets and down in others.
Inflation, along with growing consumer and investor confidence, has economists speculating that the central bank will raise its key interest rate on May 31. Some predict it could go as high as two percent by year’s end and put downward pressure on housing prices.
If you can absorb the effect of a rise in interest rates on your monthly mortgage payments, it might be worth waiting to see where prices go; if you're sensitive to rate fluctuations and seeking a long-term property investment, now may be the time to make your move.
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