“87 per cent of residents of B.C. who were polled believe real estate is a good investment (compared to 84 per cent of Canadians).”
[From an investment perspective, when 87% of any population take up one position, it is wisest to take the opposite position. - vreaa]
Question: “The amount at which, if your monthly mortgage payment increased this much, you would be concerned with your ability to make your payments”.
32% of canadian respondents could not make additional payments of $300 more per month
70.2% of Canadian homeowners have a mortgage and/or HELOC on their homes.
Of those, 22% (1.5 million owners) have less than 25% equity in their homes, and 47% have less than 50% equity.
10% of home owners with mortgages have taken out equity during the past year.
The average amount taken out was about $49,000.
During the past year renovation activity resulted in $28.5 billion of equity take-out by mortgage holders.
“Many Canadians believe that other people have taken on too much debt or have bought homes for which they are unprepared. But, when responses about their own situations are aggregated, most believe that they have been responsible. The contrast between these sets of responses is interesting. Actual behaviour by people and their beliefs about their own behaviour tells us more than does their beliefs about the behavior of other people: overall these responses suggest that prudence rules the land.”
[Alternative interpretation: Individuals are inherently biased towards making overly optimistic forecasts regarding their own future prospects. Thus these individuals may be accurate about seeing risk in the situations of others, but far less so when it comes to assessing their own risk. - vreaa]
- Annual State of the Residential Mortgage Market in Canada, Canadian Association of Accredited Mortgage Professionals, Nov 2011 [pdf], and discussion thereof (‘British Columbians think prices unreasonable but real estate still a good investment’, Vancouver Sun, 9 Nov 2011)