Almost two-thirds of Canadians think the time is right to buy a house despite the ongoing global recession, according to a new survey released Wednesday.

RBC said 65 per cent of people in this country term the current housing sector a "buyer's market." More than a quarter of Canadians said they would look to buy a new house within the next two years.

That optimism is despite the current economic environment: Canada's GDP dropped by an annualized 3.4 per cent in the last three months of 2008 and home prices were down more than 11 per cent in January 2009 compared to a year earlier.

"The current economic environment does not appear to have dampened Canadians' overall confidence in the housing market," said Karen Leggett, head of RBC's Home Equity Financing.

"Canadians continue to have an overwhelming belief in the long-term value of a home and we're seeing this in the buying intentions of many first time homebuyers this year," she said.

Indeed, the current interest in purchasing a new home was four percentage points higher than the 23 per cent for the same time in 2008 and is at its highest level since 2007.

Falling home prices

One reason for the relatively positive outlook among Canadian homeowners and potential purchasers was the belief that slumping home values will drop even further in 2009.

More than half — 54 per cent — of Canadians said they think housing prices will be lower this year than they were at the end of 2008.

Cheaper prices combined with falling interest rates — down 50 basis points after March's rate cut by the Bank of Canada —indicate that people believe they will be able to pay less for a relatively valuable asset that will begin rise in net worth as the economy recovers.

Of course, that scenario only plays out as the economy recovers

In another recent survey, a majority of Americans said they think the North American recession is getting worse, not better, a situation that could pushing home values down further and delay a decision to buy a new home.

Regional differences

Alberta remains the most optimistic place in Canada for home buying in the near future.

In the oil-rich province, 35 per cent of residents said they will purchase a new abode this year or in 2010. That level of buying interest contrasted sharply with Quebec where only 22 per cent of those surveyed said they would buy a home in 2009 or the year after.

In Ontario, 30 per cent of people asked expressed an interest in purchasing a new house.

Ipsos Reid conducted the poll between Jan. 6 and Jan. 9, 2009. The online survey of 2,026 adult Canadians is considered accurate to within 2.2 percentage points, 19 times out of 20.