Canadian Consumer Confidence Depends on Housing Market

Canadian Consumer Confidence Depends on Housing MarketCanadians are feeling positive about their personal finances following the recession, but most of that optimism is based on the soaring value of their homes – a glow that could evaporate quickly if the housing market slumps.

In the latest Consumerology Report, a quarterly survey conducted for Toronto advertising agency Bensimon-Byrne that tracks trends in Canadian consumer attitudes, respondents were generally happy about their financial position.

It appears that the boost in real estate values “is the only thing that is making them feel [positive],” said David Herle, principal of Gandalf Group, the research firm that conducted the survey. Click here to view full article.

Continued recovery of the Canadian economy depends on consumer confidence which, apparently, remains high only because home values are rising. This should give the Bank of Canada pause as they consider raising interest rates later this year, as this could easily jam a stick in the spokes of the housing market and thus potentially derail the recovery. Another straw in the wind suggesting that low mortgage rates could be with us for quite a while.