The Financial institution of Canada’s fourth-quarter client expectations survey reveals that regardless of recession considerations, 22.4% of respondents see a larger than 50% likelihood of shifting to a brand new major residence inside the subsequent 12 months—up from 21.1% within the earlier quarter.
Equally, 13.5% of respondents plan to promote their house inside the subsequent 12 months, up from 11.4% in Q3. The outcomes additionally present elevated curiosity from renters, with 19.9% contemplating a house buy within the subsequent 12 months, in comparison with 16.9% final quarter.
The Financial institution of Canada attributes the rise in homebuying intentions to expectations of additional rate of interest cuts in 2025.
“Survey outcomes present that these house‑shopping for intentions are supported by shoppers seeing and anticipating simpler credit score situations,” the report notes.
Nevertheless, it additionally cautions that the timing of house purchases stays unsure for a lot of: “…these planning to purchase a house over the following 12 months stated they anticipate round a 50% likelihood of really carrying via with these plans.”
Inflation expectations again to pre-pandemic ranges
The This fall survey revealed that inflation expectations have largely returned to historic norms.
Shoppers’ inflation expectations for meals and gasoline stayed regular within the fourth quarter, whereas expectations for hire eased. Nevertheless, they nonetheless anticipate hire will rise sooner than pre-pandemic ranges.
Because of the enhancing inflation outlook, shoppers expressed sturdy intentions to extend spending on necessities and housing over the following 12 months. For the primary time since 2021, they anticipate their spending will outpace value will increase.
The outlook isn’t all rosy
Regardless of some enhancements in client sentiment within the fourth quarter, the survey discovered almost half of Canadians (47%) nonetheless anticipate a recession within the coming 12 months. Practically six in 10 additionally expressed uncertainty over the place the economic system is headed.
“Survey outcomes present that the sources of this uncertainty have shifted from rates of interest and authorities insurance policies to international tensions, together with from the brand new U.S. administration,” the report famous.
Whereas shoppers are gaining confidence of their monetary well being and spending plans, confidence within the labour market continues to say no, significantly amongst younger folks and people with a highschool diploma or much less training.
Enterprise sentiment stays subdued
The Financial institution of Canada’s fourth-quarter 2024 Enterprise Outlook Survey (BOS), additionally launched on Monday, revealed cautious optimism amongst companies, with sentiment nonetheless subdued.
Carried out throughout the U.S. presidential election interval, the survey discovered 40% of respondents count on damaging impacts from the brand new U.S. administration, whereas a 3rd are unsure.
Companies report continued gentle demand as a consequence of cautious shoppers, although gross sales expectations have improved considerably, now barely above the historic common.
Labour and capability constraints have eased, with many corporations choosing a “wait-and-see” method and planning to keep up steady employment. Whereas wage pressures are anticipated to ease, some companies anticipate passing value will increase to shoppers. Consequently, 20% of respondents now count on inflation to exceed 3% over the following two years, up from 15% final quarter.
“On the enterprise aspect, the optimistic information is that funding intentions have picked up, particularly within the vitality sector,” TD economist Maria Solovieva wrote in a analysis word.
Whereas she famous that rising expectations for future gross sales recommend that companies stay on “strong footing” heading into 2025, she added “there’s a sense of tense anticipation, as looming risk of tariffs runs as a standard risk all through the BOS survey.”
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Final modified: January 20, 2025
