The first interest rate cut from the Bank of Canada in more than four years will not be enough to help most prospective homebuyers feeling sidelined by high borrowing costs, new polling suggests.
The Ipsos poll conducted exclusively for Global News after the Bank of Canada’s 25-basis-point rate cut on June 5 shows pessimism about housing affordability persists.
The central bank’s policy rate is a key input into housing costs, affecting both the size of mortgage Canadians can qualify for and the amount they pay on a monthly basis.
Just over six in 10 respondents (63 per cent) to the polls said they’ll remain on the sidelines of the housing market due to high interest rates. More than 1,000 Canadians aged 18 and older were interviewed online between June 7-10.
Among those who don’t own a home, some six per cent said interest rates would have to drop by less than one percentage point for them to consider buying a property. One in four said they’d need to see cuts of between one and 3.99 percentage points to get into the market, while 10 per cent said they needed steeper drops to make home ownership a possibility.
Some 45 per cent maintain that they won’t be able to afford a home no matter how much interest rates decline.
Most Canadians (78 per cent) indicated that owning a home in Canada is now only for the rich, a slight decrease from the 80 per cent who said as much in similar polling from April.
Six in 10 respondents (62 per cent) said they’d given up on ever owning a home — that, too, is down from 72 per cent in April.
Though the Bank of Canada kicked off its easing cycle last week and suggested there could be more interest rate cuts in the cards this year, rates remain at elevated levels.
Among those who currently own property, a third said they’re worried they won’t be able to hold onto their home due to high mortgage rates.
Two-thirds (67 per cent) of Canadians with a mortgage said that if they were to renew or get a new mortgage this year, they’d choose a fixed rate. Some 30 per cent would opt for a variable rate.
The Bank of Canada’s next interest rate decision is set for July 24.
These are some of the findings of an Ipsos poll conducted between June 7 and 10, 2024, on behalf of Global News. For this survey, a sample of 1,001 Canadians aged 18+ was interviewed online. Quotas and weighting were employed to ensure that the sample’s composition reflects that of the Canadian population according to census parameters. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ± 3.8 percentage points, 19 times out of 20, had all Canadians aged 18+ been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
© 2024 Global News, a division of Corus Entertainment Inc.