Buyers nervous about economy says survey

As the Canadian real estate market continues to rebound from a steep decline a year ago that was brought on by the recession, home buyers remain nervous about the stability of the economy, according to a survey of 1,225 Royal LePage agents and brokers across Canada. However, few buyers think home prices will decline again.

When asked to comment on the most common fears they heard from home buyers during the last three months, 38 per cent of Royal LePage agents and brokers cited economic stability and related factors such as job security. Twenty-three per cent said home buyers fear they may not be able to sell their existing homes at the price they are hoping for, while 12 per cent said buyers are hesitant because they believe prices have not yet hit the bottom of the cycle. Twenty per cent of agents and brokers said they have not heard any concerns from buyers.

The survey, conducted online in November, also found that an increasing number of Canadians are purchasing homes as investment properties, and almost 50 per cent of brokers and agents say the number of buyers intending to renovate their properties after purchase is increasing.

“Given the volatility in the real estate markets over the past 18 months, it is not surprising that the state of the economy continues to weigh on the minds of Canadians as they consider buying a home,” says Phil Soper, president and chief executive of Royal LePage. “Our survey shows that consumer confidence is edging towards normal levels. Canadians clearly believe that the worst of the recession is behind them and that the real estate market is on the path to sustainable recovery.”

Although the supply of homes for sale continues to be constrained in many markets across Canada, Royal LePage is predicting that once housing supply returns to normal levels, the economy will support modest pricing growth into 2010.