- Half (47%) of Canadians expecting to delay making a real
estate transaction or major purchase in the next 12 months due to
rising interest rates
- Three-in-ten (30%) believe Canada is already in a recession, while half
(53%) say we're about to enter one
- More than half (57%) expect to spend less money this holiday
season than last year
- Half (48%) do not believe interest rate increases have been
effective in slowing inflation
TORONTO, Oct. 25,
2022 /CNW/ - The significant spike in Canada's key interest rate has already had a
considerable cooling effect on Canadian spending, and many are
bracing for an even more challenging 2023 with no end to rate hikes
in sight.
According to a new survey of 1,515 Canadians conducted by Dye
& Durham among members of the online Angus Reid Forum, this
year's swift and sustained rise in interest rates has caused
one-in-three (33%) Canadians to delay making a real estate
transaction or major purchase. One-in-ten (9%) say they have
delayed buying a house this year, while the same proportion (10%)
expect to delay purchasing one in the next year. Sellers are
bracing for a shock as well, as nearly one-in-five (17%) Canadians
expect their home will never reach the same value it did prior to
2022's interest rate increases.
Economic uncertainty is weighing on the minds of many Canadians.
More than half (53%) of Canadians believe the country is about to
enter a recession, while three-in-ten (30%) believe we are already
in a recession. Concerns about the strength of the economy are
already weighing on consumer spending plans for the remainder of
2022, with the majority of Canadians (57%) saying they are planning
to spend less this holiday season than they did last year.
"The effects that the one-two punch of rising interest rates and
recession worries are having on spending and real estate plans
cannot be understated. The average Canadian is concerned about what
lies ahead and is bracing for a recession by tightening up their
spending and delaying major purchases," says Martha Vallance, Chief Operating Officer, Dye
& Durham. "The knock-on effect that this is likely to have on
the businesses and professionals that rely on consumer spending and
real estate transactions in 2023 is
significant."
Other findings of note from the survey included:
- One-in-ten (12%) Canadians say they will continue to rent
instead of buy a home until rates subside
- One-in-five (19) say they expect rising rates will mean it will
take them significantly longer to pay off their mortgage than
originally anticipated, while nearly one-in-ten (8%) expect they
will need to take on additional debt in order to afford their
current mortgage
- Three-in-ten (30%) Canadians say they've dipped further into
their savings than expected this year, while 17% have taken on debt
to afford bill payments
- One-third (32%) of Canadians say they expect the Bank of
Canada to increase interest rates
by at least an additional 100 basis points (1 percentage point)
before the end of the year. Concerningly, almost half (48%) say
they don't believe that the interest rate increases seen since the
beginning of the year have been effective in slowing inflation,
while more than half (53%) believe inflation will continue to
increase over the coming six months.
Opportunities in a challenging market
Businesses and professionals with a direct interest in consumer
spending and real estate transactions – lawyers and law firms, real
estate agents and brokers, mortgage brokers and more – experienced
record numbers during 2021's real estate frenzy.
While the record number of real estate transactions last year
had a significant positive impact on bottom lines, the sheer volume
of sales meant many professionals in the space were unable to move
forward with broader strategic plans designed to improve their
operations. With an expected slower market ahead, 2023 presents an
opportunity to move forward initiatives that can help their
operations in any market.
"Even with the prospect of an even further slowing real estate
market in 2023, professionals that bank on transaction volume have
opportunity in the year ahead to take a closer look at their
business and find ways to become more efficient," says Vallance.
"Agents, brokers and lawyers that use this next phase of the market
to streamline and improve their workflows and become more nimble
will have a significant advantage once transactions return to
previous levels."
About the survey
This survey was conducted by Dye & Durham from October 19-21, 2022 among a nationally
representative sample of n=1,515 who are members of
the online Angus Reid Forum, balanced and weighted on
age, gender, region and education. For comparison purposes only, a
probability sample of this size has an estimated margin of error
of +/- 2.5 percentage points, 19 times out of 20. The survey
was offered in both English and French.
About Dye & Durham
Dye & Durham is a global tech company that specialises in
providing legal, financial and government service professionals
with cloud-based solutions for business transactions and regulatory
compliance. Everything we do focuses on improving the
precision, confidence, and rigour of our customers. We provide
the software and connectivity so they can work with
certainty.
Dye & Durham Corporation has operations in Canada, the United
Kingdom, Ireland, and
Australia. It has a strong
blue-chip customer base that includes law firms, financial service
institutions, and government organisations. Our easy-to-use
platforms connect professionals with the most reliable public
records and government registry data for faster reporting and
active receipt of critical information. We have standardised and
automated workflows for greater operational efficiency and
productivity.
For further information visit www.dyedurham.ca.
SOURCE Dye & Durham Limited