Residential Market Commentary - Canadian financial confidence flags

  • First National Financial LP

Despite falling inflation, declining interest rates and continued (albeit weak) growth, Canadians remain gloomy about the economy.

Last week, marketing and research firm Leger released an update to the 2024 Economic Confidence Survey it published in January.  It suggests 63% of Canadians feel the economy is poor or very poor.

A key reason for the sombre attitude is housing affordability.  It was cited as a top concern by 46% of respondents, replacing inflation as the Number-One worry.  Inflation dropped to second spot, being chosen by 42% of those surveyed.

Higher housing costs have people changing their spending and saving habits.  More than half of Canadians (51%) have been hit by mortgage or rent increases in the past two years.  Nearly two-thirds of those people are spending less while about one-third are saving less.  A quarter of them have been making withdrawals from their savings.

Canadians are somewhat more confident about their own, household finances.  Nearly 60% say they consider their household finances to be good or very good, and 17% expect them to get better.    Significantly, 37% feel their household finances are poor or very poor with 22% expecting them to get worse.

In the updated survey fewer people indicated they expect to cut their discretionary spending over the next six months.  The number fell five percentage points to 27% in July, compared to January.

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