Investing In Their Homes Still Most Important For Canadians

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By Elli Davis, January 6, 2010

Wealth by TMAB2003

According to the poll conducted for Manulife Financial in December 2009, with the start of the new year, more and more Canadians are mainly concentrating on paying their own loans. This result came after three quarters of consecutive increases of interest in investment.

The priority of paying down debts reached a five years' high in December. 28 percent of 1,000 polled Canadians now claim their top priority is to take care of their consumer credit. The result was 24 percent last year and 20 percent two years ago. The second most popular priority is paying down one's own mortgage. 14 percent of respondents share this opinion, in comparison with 11 percent from a year ago. The next top choice of Canadians is saving for retirement. This option was chosen by 11 percent of Canadians, compared to last year's 14 percent.

Concerning overall financial state of Canadians, 46 percent of respondents think their financial situation is better now than it was 5 years ago. This result decreased by 5 percent from last year and in comparison with the period two years ago, there is a 14 percent decrease. 28 percent of polled Canadians believe that their financial situation 5 years back was just the same as it is today, and 25 percent of Canadians consider their current situation to be worse than it was in late 2004.

As for Manulife Sentiment Index, after three quarterly gains in a row, it has decreased in December from 3 months earlier by 7 points to +18. The index is focusing on the thoughts and feelings of Canada citizens about investing in different categories.

It is mainly based on these categories:

-Investing in their homes is the top choice of Canadians. The index for investing in their property decreased in December 2009 by 5 points, to +52, though.
-Investment in real estate decreased by 13 points in December, after quite a few gains this year. However, its current level, +27 is still much higher than the lever from a year ago, when it was in a negative territory.
-Balanced funds increased by 2 points to + 16 in December 2009.
-Cash and fixed income investments decreased by 8 points to + 10 in December.
-Equities decreased by six points and their current level is -5.

I'm quite pleased to see Canadians still find investing in their homes this important. Also, good to know that Canada has very responsible citizens making paying down loans their top priority. Makes me wonder whether this was somehow influenced by multiple warnings of the Bank of Canada's representatives.