Canada’s economic performance over the past few years has been strong relative to other developed economies and it appears that this is having an influence on the outlook of Canadian homebuyers. In act, Canadians were optimistic about both the economy and the housing market; 38% felt positively about the economic outlook compared to an average of 30% across all countries surveyed, and 47% believe that now is a good time to buy a home compared to an average of 42%.
With over 32% of Canadians feeling very positive about the economy and 47% feeling good about the housing market, Canadians are willing to take on additional debt to achieve their home ownership dreams. According to survey respondents, higher levels of personal debt were likely due to increased costs of living; however, Canadians have an appretite for debt and a willinghness to take on high loan to value loans.
In Canada, mortgage insurance is required for loans with a loan to value of higher than 80% and Canadian respondents were very comfortable borrowing at this level in comparison to more debt averse countries. In total, 28% of Canadians were comfortable borrowing more than 80% of the value of their property, compared to the average of 20% for all countries surveyed.
While higher debt levels were seen by Canadian mortgage holders, most still easily met mortgage repayments and were expecting to meet them comfortably in the year ahead. Over the past year, 79% of mortgage holders either madeprepayments or easily met their repayments and 83% expected to easily make repayments over the coming year. In fact, Canadians were among the most optimistic about their ability to meet mortgage repayments, behind only India.