Canadians don't expect mortgage rates to rise, but do expect housing prices to go up, says RBC survey



    Canadians voicing "buy now rather than later" preference

    TORONTO, March 6 /CNW/ - The possibility of mortgage rates rising in 2007
seems to be of much less concern across Canada, according to RBC's 14th Annual
Homeownership Survey. In fact, over half (57 per cent) of Canadians believe
mortgage rates will drop or stay the same, compared to 31 per cent last year.
The RBC poll also reveals that 49 per cent of Canadians are less apprehensive
about interest rate increases, compared to 44 per cent in 2006.
    "When we assess the consumer sentiment being expressed in this year's
study, a picture emerges of confident Canadians weighing their homebuying
options in a very positive light," explained Catherine Adams, RBC's
vice-president of Home Equity Financing.
    At the same time, while over half of Canadians (59 per cent) believe
housing prices will rise in 2007, homebuying intentions are holding steady,
with three in ten Canadians (28 per cent) planning to buy a house over the
next two years.
    As for the value Canadians place on homeownership, the vast majority (90
per cent) think purchasing a home is a good investment, according to RBC's
poll. As well, the percentage of Canadians who estimate that the market value
of their homes has increased by 50 per cent or more over the past two years,
has doubled since last year's survey (11 per cent compared to 6 per cent.)
    "It's clear an overwhelming majority of Canadians believe purchasing a
home is a good investment. In fact, the average Canadian estimates their home
has increased by 22 per cent in the last 2 years," Adams added. "And the 'buy
now' message is coming through loud and clear across all age groups - from 25
through to 55 plus."
    Of those Canadians planning to buy a house within two years, an
increasing number are looking at a shorter purchasing window. Over half (58
per cent) of all Canadians are saying buy now, don't wait for next year.
Forty-four per cent (up from 37 per cent in 2006) are looking at buying within
the next 12 to 18 months.

    RBC Homeownership Survey 2007 Details
    -------------------------------------

    Regional differences
    Focusing on very likely to buy intentions, BC, Ontario, and the Prairies
are holding steady from last year, but the numbers have softened in other
regions with Alberta going from 18 per cent to 12 per cent; Atlantic going
from 14 per cent to 10 per cent.

    Renters and owners
    Within the next 18 to 24 months, 62 per cent of renters and 48 per cent
of owners plan to buy a home. Within the shorter timeframe of the next 12
months, owners outnumber renters, 27 per cent to 18 per cent.

    Housing type preferences
    Detached homes continue to be the housing type of choice for most
Canadians who are likely to buy a home in the next two years - 72 per cent
voiced this preference. Condominiums were preferred by 10 per cent, down from
12 per cent last year. Semidetached homes were cited by 7 per cent, up from
4 per cent in 2006. Townhouses fell to last choice, named by 6 per cent of
Canadians planning to buy in the next two years, down from 8 per cent last
year.

    More Canadians thinking "small" for next home purchase
    Desiring a bigger house continues to be the most popular reason for an
upcoming move, cited by 48 per cent of Canadian homeowners who are planning to
purchase a home in the next two years. However, an increasing number are now
saying they'll be looking for a smaller home - 33 per cent compared to 20 per
cent in 2006. Eighteen per cent responded that they'll be considering a home
about the same size as their present one.

    Gently used tops newly built
    Of Canadians planning to buy a home in the next two years, more are
likely to buy a resale home (77 per cent) than a newly-built home (23 per
cent). This compares to 74 per cent who favoured resale in 2006, and 26 per
cent who preferred a newly-built home.


    
    -------------------------------------------------------------------------
    RBC 2007 HOMEOWNERSHIP SURVEY    Nat   BC    AB   SK/MB  ON    QC    AT
    RESPONSES
    -------------------------------------------------------------------------
    Own a home                       61%   62%   68%   66%   63%   52%   66%
    -------------------------------------------------------------------------
    Percentage of homeowners who
     have a mortgage                 63%   65%   58%   52%   65%   64%   57%
    -------------------------------------------------------------------------
    Homeowners who will likely
     choose a fixed rate when they
     next renew their mortgage       54%   58%   59%   69%   53%   42%   66%
    -------------------------------------------------------------------------
    Are very likely to purchase a
     home in the next two years       9%   11%   12%   10%    9%    6%   10%
    -------------------------------------------------------------------------
    Believe mortgage rates will be
     higher in one year's time       43%   45%   46%   43%   44%   38%   49%
    -------------------------------------------------------------------------
    Believe housing prices will be
     higher in one year's time       59%   65%   68%   63%   62%   47%   58%
    -------------------------------------------------------------------------
    Homeowners who have borrowed
     against the equity in their
     homes                           39%   40%   46%   46%   42%   28%   33%
    -------------------------------------------------------------------------
    Homeowners who have refinanced
     their home in the last 12
     months                          28%   29%   29%   30%   27%   25%   29%
    -------------------------------------------------------------------------
    Plan to buy a bigger home        48%   49%   43%   51%   47%   59%   37%
    -------------------------------------------------------------------------
    Plan to buy resale home          77%   80%   76%   84%   76%   78%   70%
    -------------------------------------------------------------------------



    Five year historical trends at-a-glance
    -------------------------------------------------------------------------
                                                                 2007   2002
    -------------------------------------------------------------------------
    Canadian intentions to purchase a home/another home
    within the next two years
    -------------------------------------------------------------------------
    Very/somewhat likely                                         28%    23%
    -------------------------------------------------------------------------
    Not very/not at all likely                                   72%    77%
    -------------------------------------------------------------------------
    Canadian homebuyers' timing
    -------------------------------------------------------------------------
    In the next 6 months                                          8%    12%
    -------------------------------------------------------------------------
    In the next 6 to 12 months                                   14%    17%
    -------------------------------------------------------------------------
    In the next 12 to 18 months                                  22%    19%
    -------------------------------------------------------------------------
    In the next 18 to 24 months                                  55%    48%
    -------------------------------------------------------------------------
    Likely to buy newly built or resale home
    -------------------------------------------------------------------------
    Newly built home                                             23%    32%
    -------------------------------------------------------------------------
    Resale home                                                  77%    65%
    -------------------------------------------------------------------------
    The size of home preferred by Canadians homebuyers
    -------------------------------------------------------------------------
    Bigger home                                                  48%    49%
    -------------------------------------------------------------------------
    Smaller home                                                 33%    19%
    -------------------------------------------------------------------------
    About the same size home                                     18%    32%
    -------------------------------------------------------------------------
    Expectation of mortgage rates for this time next year
    -------------------------------------------------------------------------
    Higher                                                       43%    54%
    -------------------------------------------------------------------------
    Lower                                                        16%     9%
    -------------------------------------------------------------------------
    About the same                                               41%    33%
    -------------------------------------------------------------------------
    

    RBC is the largest residential mortgage lender in Canada with more than
$109 billion in loans outstanding at the end of 2006 and over 15.5 per cent of
the Canadian mortgage market. As the country's number one source of financial
advice on homeownership, RBC conducts consumer surveys as one way to provide
insight to Canadians about the marketplace in which they live.
    These are some of the findings of an RBC poll conducted by Ipsos Reid
between January 18 and 22, 2007. The online survey is based on a randomly
selected representative sample of 2,404 adult Canadians. With a representative
sample of this size, the results are considered accurate to within +/-2.0
percentage points, 19 times out of 20, of what they would have been had the
entire adult Canadian population been polled. The margin of error will be
larger within regions and for other sub-groupings of the survey population.
These data were statistically weighted to ensure the sample's regional and
age/sex composition reflects that of the actual Canadian population according
to the 2001 Census data.

    For full tabular results, please see the Ipsos Reid website at
www.ipsos.ca.





For further information:

For further information: Media contact: Kathy Bevan, Media Relations,
(416) 974-8810


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