Manulife recently released the results of its latest household debt survey. Focusing on the entire Canadian market, this analysis highlights a few areas of concern in the Canadian real estate market. The report has generated a lot of media attention. Here is a summary of the areas of concern:
The survey was based on 2,001 Canadians between the ages of 20 and 69 with household incomes over $40,000 and was conducted from April 14 to 20, 2022, just after the Bank of Canada’s decision to raise its key interest rate to 1 per cent. Since then, another 0.5 per cent increase has been implemented, and historically high inflation is expected to force the Bank to continue these increases in the coming months.
The vast majority of those surveyed (80 per cent) believe that there is an affordable housing crisis in Canada.
A significant number of homeowners (almost 25 per cent) said in the survey that further increases in interest rates could force them to sell their homes.
The survey suggests a relatively bleak picture of the financial outlook for Canadian households:
50 per cent of those surveyed admitted to questioning their summer vacation plans for financial reasons.
Another 50 per cent said they did not feel prepared for their long-term financial future.
44 per cent of retirees say they do not have a financial plan for retirement.
