by Josh Wingrove
Consumer confidence hit a fresh high this year as the number of Canadians expecting a decline in real-estate prices dropped, telephone polling shows.
The Bloomberg Nanos Canadian Confidence Index rose to 57.9 from 57.8 a week earlier, reaching the highest level since November. The gain was driven by increased housing optimism: the difference between the share of those expecting a price increase over six months and those expecting a decrease rose to 30.2 percent, the widest gap since October 2014.
The figures come after Bank of Canada Governor Stephen Poloz warned last week of housing overvaluation in the country’s two biggest markets, Toronto and Vancouver. The federal government announced tighter mortgage rules in December, but bank executives said this month that further steps are needed to cool surging prices.
“Perceptions related to the value of real estate continue to be a key driver of positive consumer sentiment in Canada, with positive sentiment noticeably above the 2016 average,” said pollster Nik Nanos, chairman of Ottawa-based Nanos Research Group.
All told, 44.6 percent of respondents now expect an increase in the value of real estate in their neighborhood over the next six months — well above the 2016 average of 37 — while just 14.4 percent expect a decrease, the lowest share since November.
Overall sentiment remained steady across Canada’s major regions, stabilizing in particular in the energy-rich prairies, where the commodities downturn has sapped confidence. The Nanos index score in the prairies has now held at above 49 for three weeks after bottoming out at a record low of 41.4 in February.
Nationally, the pocketbook sub-index — measuring personal finances and job security — sunk to 58.8 from 59.1 a week earlier. The expectations sub-index — measuring sentiment for housing and the economy overall — rose to 57 from 56.5.
The share of those who described their jobs as not at all secure fell to 6.4 percent, the lowest since February, from 7.2 percent a week earlier. Amid growing uncertainty, the overall share for those with a positive outlook on their job security fell to 67.7 from 68.2 a week earlier, remaining below the 2016 average of 68.5.
On the Canadian economy, the share of those expecting it to weaken in the next six months fell to 26.3 percent from 27.6 percent a week earlier. The share of those expecting an increase edged up to 24.1 from 24 a week earlier.
The Bloomberg Nanos Canadian Confidence Index is based on 1000 responses from a four-week rolling average of telephone polling. It’s considered accurate within 3.1 percentage points, 19 times out of 20, with larger margins of error for regional breakdowns. The latest round of polling ended June 10, 2016.
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