Concern that real estate prices are likely to slow in 2016 has led to a further drop in the weekly Canadian Consumer Confidence Index. The poll, by Bloomberg and Nanos Research saw a drop to 54.54 in the week ending Dec 24, from 55.03 in the previous week. “Of note, there has been noticeable downward pressure on positive views on the value of real estate over the past week,” said Nanos Research Group Chairman Nik Nanos.

Positive opinions on the Canadian economy edged higher but there was lower sentiment for job security and personal finances (including mortgages.) The proportion of respondents expecting real estate prices to be higher in 6  months was down from 35.36 per cent in the week ending Dec 17 to 31.49 per cent last week.

“Consumers have reacted to the extremely low level of interest rates with a worrisome imbalance between housing market speculation and traditional household investment. It seems likely that consumer expectations and spending might suffer until labormarket displacement issues are addressed and households can repair their balance sheets”, said Robert Lawrie of Bloomberg Economics.

Across the provinces, only the Prairies saw higher confidence overall and it was generally lower income households that were more optimistic. Renters increased their confidence in the economy while homeowners’ saw a decline.