Cracks in Vancouver Housing Weaken Canadian Consumer Sentimentby
British Columbia expectations sub-index falls most since 2013
Real-estate worries drive national confidence down 2nd week
A shifting real estate market in Vancouver led Canada’s consumer confidence index lower for a second week, telephone polling shows.
The share of respondents who see local real estate prices falling has almost doubled in the last two weeks, rising to 22.5 percent in the latest survey, up from previous readings of 20.5 percent and 12 percent. The share of those who see higher prices fell to below 40 percent for the first time since April.
Home sales dropped 26 percent in August from a year earlier, the Real Estate Board of Greater Vancouver said last week. The provincial government announced in July it would impose a 15 percent tax on foreign buyers, a measure designed to take some of the steam out of a market which has seen prices about double over the past decade, squeezing out local families.
“Negative pressure on the perceptions of real estate value continues, particularly in the province of British Columbia,” said Nanos Research Group Chairman Nik Nanos.
British Columbia’s expectations sub-index, which measures the outlook for housing and the economy, fell by the most since July 2013 to 60.9. The average price of a detached property in Vancouver declined 17 percent in August to C$1.47 million ($1.14 million), the real estate board said, still high enough to chew up most of a typical family’s paycheck.
Housing jitters dragged the broader Bloomberg Nanos Canadian Confidence Index down to 58.4, from 59.3 previously, the second straight drop from the 2016 high of 59.9. Readings on the economy also deteriorated, while perceptions of job security and personal finances showed slight improvements.
The Bloomberg Nanos Canadian Confidence Index is based on a four-week rolling average of telephone polling with 1,000 respondents. It’s considered accurate within 3.1 percentage points, 19 times out of 20. The latest round of polling ended Sept. 2.