That’s what the real estate industry desperately wants to find out. They think that if they restore ‘buyer confidence’, the boom times for real estate sales will return.
And the linchpin to the equation is young adults and renters (the entry market segment).
If the Industry can convince the entry market segment to get out there and buy, it will unblock the buying dam which, in turn, will free up current homeowners to upgrade to more expensive houses.
So today yet another ‘survey’ is released to make the rounds and influence opinion. This time its the annual homeowner survey from the Royal Bank.
“Confidence appears to be seeping back into the housing market, with young Canadians the most optimistic that now is a good time to buy.” shrieks the survey.
Then a young couple is profiled. Trotted out for the media story is thirty-year-old David Morris, who owns a condominium in downtown Vancouver. We are told he is among those actively planning to purchase a home. He's looking to sell his condo and trade up to a house in Vancouver's trendy Kitsilano or North Shore districts and is planning to get married by the end of the year. “We have made the decision to move forward. It's not a situation where we're going to force it, but if we can find the right house for the right price, we have made the decision to get serious about it,” says Morris.
Other young couples are buying, goes the plan, you should too!
Of course there is only a passing mention to the fact that Morris is a commercial Real Estate Broker, a member of the Industry.
Further in the article the familiar hooks are dangled. “Interest rates are at historic lows and borrowing money is very, very affordable. If you have steady employment and you have some financial responsibility along with a good interest rate, now is a really, really good time to purchase a property," said Mr. van der Wyst, an agent with Royal LePage
And then comes the best part as the article goes on to state:
“At this time, employment stability is very important. It would be really unfortunate to see someone lose their job just as they were about to close on a property. A number of leading Canadian economists have observed that Canada's rising unemployment rate has eroded consumer confidence, and other recent housing forecasts have been less upbeat than the Royal Bank survey.”
And that’s the problem, isn’t it? When people are worried about hanging on to their jobs, they aren't going to buy, are they?
But does Royal Bank caution you to ensure you have a stable job... caution you to wait a bit to make sure the economy is on sound ground before commit to a massive amount of debt just when things are the worst they have been, economically, in almost 30 years?
Nope... they just seek to instill a little confidence, as in - follow the crowd like a complient sheep - type of confidence. Mr. Morris is going to buy, you should too.
The survey doesn't focus on the real problem: the overvalued homes, the realtors who are focused on their commission instead of the well being of their clients, the bankers who are giving giving mortgages to kids who may well be underwater with this mortgage in a year (hey CMHC insurace protects them) or the developers.
No the problem endless news storis which shake ‘buyer confidence’.
And so the manipulative barrage continues with endless ‘surveys’ like this one purporting to show us that ‘confidence’ is returning regardless of how bad the economy is and that ‘now is the time to buy’.
That’s why the man responsible for keeping the economy humming, Bank of Canada govenor Mark Carney, pushed the panic button yesterday, reducing the Bank of Canada's key interest rate to nearly zero in hopes of getting consumers buying again.
That’s why Ontario Premier Dalton McGuinty came out today and reassured workers at U.S. Steel Canada they will get their pensions despite massive layoffs. But he admits he doesn't know what that means in terms of bringing back any of the 1,500 lost jobs amid a temporarily shutdown of its Hamilton mill and most of its Lake Erie operations.
Is now the time to buy for the 1,200 employees tossed out on the unemployment line today when Chrysler eliminated the third shift at its minivan assembly plant in Ontario?
Or is it the time to buy for the 423 laid off today from Nickel giant Vale Inco Ltd? Or the 50 staff members at the Toronto Star who received layoff notices today? Or for the members of the Two Nova Scotia pulp mills who were told today to stay home for another five weeks, starting March 15?
The fact of the matter is job losses have only begun to pile up.
We are in for a very difficult couple of years, which is why Carey says he may reduce the interest rate below the current 0.5%.
They only confidence most Canadians have right now is that they cannot be so easily manipulated by the likes of such a ridiculously self-serving survey put out by the mortgage industry to sell its own mortgage products.