Most Canadians say they can weather housing crash: RBC
Three-quarters of Canadians say their personal finances could survive a falling housing market, according to a new RBC poll released Wednesday.
The bank's survey of homeownership patterns said 73 per cent of 2,103 Canadians asked believe they are "well-positioned to weather a housing drop".
"Canadians believe in the long-term benefits of owning a home," said Marcia Moffat, RBC's head of home equity financing.
RBC, Canada's largest mortgage lender, released the results as part of its 18th annual homeownership survey.The bank's poll was conducted between Jan. 12 and 17 and is accurate within 2.2 percentage points 19 times out of 20.
Interestingly, 90 per cent of respondents said buying a house was a good investment. And 85 per cent of those polled said they were doing a good job paying down their mortgage.
The homeowners' optimism flies in the face of an October survey by RBC that noted 58 per cent of Canadians said they couldn't meet their savings goals with fully 38 per cent saying they couldn't save at all.
"Our clients tell us that one of the main challenges to saving is paying yourself first — being able to put aside money before it gets spent," said RBC's Maria Contreras in October.
Canada's savings challenge has led some economists to ask whether the country faces a housing bubble similar to what occurred in the United States in the recession of late 2008.
Canada's mortgage market has expanded by about 10 per cent in the past decade, according to the Canadian Association of Accredited Mortgage Professionals.
"This growth has understandably raised fears about the level of risk in the mortgage market and possible consequences for the broader economy," the association said in a January 2011 report on the state of the country's house lending market.
But CAAMP argued Canadians have not loaded up on mortgage debt to the dangerous extent that Americans did prior to the 2008 recession.
In that period, U.S. homeowners, unable to afford to cope with dropping home values, saw mortgage foreclosure rates soar as American economic fortunes sank.
By contrast, CAAMP estimated that only 2,000 or so homeowners in this country would face foreclosure problems if interest rates rise.