Canadians are increasingly pessimistic over the direction of their nation’s economy, with nearly one-third of homeowners fearing they will need to sell their residences if interest rates continue to rise.
According to the Financial Health Survey published by Manulife Bank (NYSE:MFC) that polled 2,001 Canadians, 86% of respondents said they were concerned about the direction of their economy and 84% believed they were either already in a recession or heading into one within the next year.
The survey found 71% of respondents worried about being able to afford essentials including food and housing. On the subject of housing, 70% were worried about making their mortgage payments and 85% of respondents who have to renew their mortgage in the next 12 months are worried about having to do so. The results also found 32% of homeowners with mortgages believing they will be forced to sell their homes if interest rates increase further and fewer than two in five 37% felt they were financially prepared, to weather further interest rate increases.
Additionally, household debt in Canada is on the rise – nearly half (49%) of indebted Canadians said they are not comfortable with the amount of debt they have, and four in five (79%) are increasingly worried about making their debt repayments – an increase of 14 points compared to one year ago.
“We’ve been in a period of economic volatility for a number of months and that it is not likely to change any time soon,” said Alex Lucas, president of Manulife Bank. “Despite slowing inflation, our data indicates that close to two-thirds of Canadian households still need to renew their mortgages at higher rates which will undoubtedly put a lot more pressure – and stress – on household finances.”
