Inflation fears continue to rise
In a massive change since the spring, Canadians are increasingly convinced that inflation is growing across most common and large items purchased, a new Angus Reid Strategies poll has found.
In the online survey of a representative national sample of 1,003 Canadians, more than half of respondents (55%) believe that house prices will rise in the next six months, compared to less than one-in-ten (9%) who feel that they will drop.
This is a clear indication that people believe that the real estate crash of late 2008 and early 2009 is over, and a strong sign that Canadians believe the worst of the recession is behind us. In April, nearly three-in-five people (58%) thought house prices would drop, as opposed to only 12 per cent who believed they would rise.
Canadians also believe that the days of struggling automakers slashing prices to move inventory and staying in business are in the past. Nearly a third of respondents (31%) expect the price of a new car to increase in the next six months compared to less than a quarter (24%) who think it will drop. This is also a significant change since April, when nearly two-thirds of Canadians (61%) expected car prices to drop and only 13 per cent thought the prices would increase.
Other consumer goods have seen less dramatic shifts. In general, Canadians overwhelmingly believe that the price of gasoline and the price of a week’s worth of groceries will increase over the next six months. While 82 per cent think the price of gas will rise, this is not a dramatically different proportion than the 69 per cent who felt this way in September. The inflation expectations on the price of groceries are also consistent, with 76 per cent of respondents expecting increases.
The only item which the public still expects to see drop in price is a new TV (as a proxy for consumer electronics). Two-in-five (39%) believe that prices will fall in the next six months, compared to one-in-five (20%) who think prices will rise. While this is still a net expectation of deflation it is not nearly as much as it was in April when nearly half of Canadians (47%) expected prices to drop.
Demographics
British Columbians are the most bullish on the housing market with fully two-thirds (67%) expecting real estate prices to rise. The lowest number is 47 per cent in Manitoba and Saskatchewan. In Alberta, 17 per cent expect house prices to drop, indicating a significant current of economic unease. Women (85%) are more likely than men (79%) to expect gas prices to increase. When it comes to week’s worth of groceries Atlantic Canadians are the least likely to expect increases (68%), while women are more likely to expect prices to rise (79%).
