- Two-thirds say lower interest rates will have a positive impact
on their financial wellbeing
- Nearly 40% have delayed a major purchase in the past year due
to high interest rates; more than two-in-five plan a significant
purchase once interest rates begin to decline
- Two-in-five Canadian mortgage holders plan to refinance their
home mortgage once interest rates begin to decline
- Half of current renters, including seven-in-ten 18-34 year
olds, believe lower rates will make it more likely that they buy a
home in the future
TORONTO, May 30, 2024
/CNW/ - High interest rates have had a significant impact on
the financial wellbeing of Canadians for over a year, with many
calling for immediate rate cuts. While one-third (32%) of Canadians
expect the Bank of Canada to begin
dropping rates on June 5, even more
(42%) believe there will not be a cut announced this time
around.
According to the findings of the Dye & Durham's Canadian
Pulse Report for Q2 2024, a survey of more than 1,500 Canadians on
trends in the economy, technology and real estate market conducted
via the online Angus Reid Forum, two-thirds (65%) of Canadians say
lower interest rates will make a meaningful, positive impact on
their personal financial wellbeing. Nearly two-fifths (38%) have
held off on making a major purchase in the past year due to high
interest rates. Among the 42% who expect to make a major purchase
once rates begin to decline, more than half (57%) intend to wait
for significant cuts before spending on larger items.
"It's clear that higher rates have done their job, cooling
consumer spending significantly and helping to bring inflation down
to much more manageable levels," says Martha Vallance, Chief Operating Officer, Dye
& Durham. "Consumers have said they're ready to start spending
again and are just waiting for the Bank of Canada to make its move, though few should
expect rates to return to where they were before. Industries like
real estate, automotive sales, construction and more – along with
those industries that play critical roles in supporting them –
should take note and prepare for a fast-moving market once
meaningful cuts are made."
Most Canadians say they believe lower interest rates will make
it more affordable for them to purchase or put money towards
expenses like mortgage costs (81%), the purchase price of a new
home / property (70%), the sale price of an owned home / property
(66%), home renovations (65%), and personal / emergency savings
(58%) or RRSP / retirement savings (48%). For those that are
already planning a major spend once rates begin to decline, the
most common purchases are a new car (15%), a new home / primary
residence (14% overall, 24% for renters) or a significant home
renovation project (12%).
High-rate mortgage renewals could lead to a wave of
refinancing later this year
Many Canadian homeowners that
have had to renew their mortgages in 2023 and 2024 have been
stretched by the current high interest rate environment - with some
seeing their monthly mortgage payments skyrocket by thousands of
dollars. More than two-in-five (41%) of Canadians with a home
mortgage say they plan to refinance once rates begin to decline
with Albertans (58%) in particular seeing this as a way to reduce
monthly expenses.
Renters are also closely monitoring the Bank of Canada's decision, seeing lower interest rates
as a glimmer of hope in their efforts to enter the housing market.
Nearly three-in-five (57%) say lower rates will make it easier for
them to buy a home in the future with nearly as many (50%) saying
lower rates will make it more likely that they'll be able to buy a
home in the future.
For younger Canadians (18-34), a significant number say lower
rates will make it easier to afford the purchase price of a new
home (76%) and more likely (70%) that they will eventually be able
to so.
The number of Canadians planning to sell their primary residence
and move to a new one in the next twelve months has remained
unchanged from Q1 2024 and Q4 2023 with 12% saying this is
currently in their plans. However, slightly fewer (16%, down from
18% in Q1 2024) are planning to wait until sale prices increase
before selling their house or property.
Consumer comfort with the use of AI in skilled services takes
a hit in Q2
Artificial intelligence (AI) continues to be
top-of-mind with many Canadians. However, the number of consumers
expressing discomfort with skilled service providers like doctors,
lawyers, financial advisors and insurance brokers using AI
increased over the past quarter.
Nearly two thirds (63%) say they are uncomfortable with doctors
/ medical providers and lawyers / notaries using AI to
support/conduct their services, up from 62% and 61% respectively in
Q1 2024. More than half also say the thought of investment,
financial or tax advisors (58%), insurance brokers (55%), mortgage
brokers (54%) and real estate agents / brokerages (52%) using AI
makes them uncomfortable.
"It's clear that there is still a very large education piece
that skilled service providers need to be mindful of to help their
customers get fully on board with AI," says Scott Bleasdell, Chief Product Officer, Dye
& Durham. "The average Canadian still wants to know that a
human is involved in the process, even if AI is doing a lot of the
heavy lifting. Transparency about how AI is and isn't being used
and the benefits it provides to the client will be critical in
helping legal professionals and other skilled service providers
foster widespread acceptance of AI use in their offerings."
About the Survey
Conducted quarterly, the Dye &
Durham Canadian Pulse Report is designed to uncover trends and
insights into Canadian sentiment surrounding three key areas: the
economy, technology and the real estate market. The findings of the
report are the result of a survey conducted by Dye & Durham
from May 7-9, 2024 among a nationally
representative sample of n=1,516 Canadians 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 Limited
Dye & Durham
Limited provides premier practice management solutions empowering
legal professionals every day, delivers vital data insights to
support critical corporate transactions and enables the essential
payments infrastructure trusted by government and financial
institutions. The company has operations in Canada,
the United
Kingdom, Ireland, Australia, and South Africa.
Additional information can be found at www.dyedurham.com.
SOURCE Dye & Durham Limited