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A clear majority of Canadians do not expect improved affordability or an increase in home sales as a result of the Bank of Canada's interest rate cut in June, according to a new survey by market research firm Abacus Data.
The survey results showed that 73 percent of Canadians do not expect the rate cut to have a significant impact on the affordability of homes and other major purchases. Likewise, 72 percent of respondents believe the cut will have little impact on the housing market overall.
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“The Bank of Canada’s recent interest rate cut has left Canadians cautiously skeptical about its impact on housing market affordability and activity,” the Abacus Data report said.
The survey, conducted June 6-13, was conducted by 1,550 Canadian adults following the 0.25 percent interest rate cut on June 5.
The release follows reports that there was no increase in home sales across the country following the cut.
Overall, only 35 percent of Canadians expected the interest rate cut to have an impact on housing market activity, while 46 percent predicted no change in home sales.
According to the survey, 80 percent of Canadians do not believe the rate cut will have an impact on affordability. This opinion is particularly strong among older Canadians aged 60 and over.
Sixty-one percent of respondents expect the number of homes sold to remain unchanged, while 33 percent are optimistic that the interest rate cut will lead to more sales.
Only 10 percent of Canadians plan to accelerate their home purchase because of the rate cut, while 21 percent plan to wait for further cuts. About 69 percent say the rate cut has had no impact on their purchase timeline.
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Among homeowners, 11 percent are accelerating the sale of their home in response to the rate cut, while 12 percent plan to delay the sale until further cuts. However, the majority (76 percent) say the rate cut has not influenced their decision on when to sell.
The results underscore consumers' cautious assessment of the impact of interest rate cuts on buying and selling decisions, the report says.
“When Canadians look at the Bank of Canada's recent interest rate cut, many are playing it safe,” it says. “They are not convinced that it will make buying a home cheaper or that it will change much in the housing market.”
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The margin of error of the survey is +/- 2.53 percent in 19 out of 20 cases.
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