Canadian homeowners pushed to financial limits amid inflation: Survey
Inflation is top of mind for Canadian homeowners, with 81 per cent saying in a recent survey that they are concerned about it, while 10 per cent say they are already at their financial limit and can’t handle a further rise in prices.
The survey, conducted from Aug. 19 to 21 by Leger on behalf of BNN Bloomberg and RATESDOTCA, looked at how about 950 Canadian homeowners are coping with the hottest price increases in almost four decades.
Just three days prior to the start of the survey, Statistics Canada said its consumer price index jumped 7.6 per cent year-over-year in July, which was a slight moderation from June, when CPI climbed the most since January 1983.
The surging cost of living has pushed the Bank of Canada to rapidly increase interest rates this year, including a full-point hike in July. That has put pressure on homeowners, especially those who are renewing their mortgages or have variable-rate loans.
The survey suggests that homeowners earning less than $60,000 annually are the most concerned about inflation (89 per cent). But even middle-class Canadians and high earners are feeling the pinch: 79 per cent of respondents earning $60,000 to $100,000 annually said they are concerned, while 77 per cent of those in the $100,000+ income bracket expressed concern.
If inflation remains at the current rate, 54 per cent of respondents said they believe they could sustain themselves financially for seven months or more, with 48 per cent of them being first-time homeowners.
Thirteen per cent of all homeowners who participated in the survey said they could sustain themselves at current inflation levels for only one to six months.
On the other end of the spectrum, 23 per cent of homeowners said they don’t know how long they can manage under current financial pressures, and 10 per cent said they’re already at their limit.
According to the survey, six-in-ten homeowners are taking additional measures to cope with increased costs. Forty per cent of respondents said they tapped into their savings to help pay for increased costs; 15 per cent took on extra work; 13 per cent tapped into lines of credit, credit cards, or other forms of debt; seven per cent looked for better-paying jobs; five per cent asked for a raise; and four per cent said they used a home equity line of credit.
BNN Bloomberg has teamed up with RATESDOTCA to take the pulse of Canadians every month on key pocketbook issues as we strive to better understand how households are navigating COVID-19. This is the latest instalment in monthly special coverage.