November 6th Mortgage Industry Update
November 6th, 2018 Mortgage Industry Update
The Bank of Canada announced on October 24th that it’s overnight lending rate will increase to 1.75% from 1.50%. The prime rate increases from 3.70% to 3.95%. The common prediction currently stands at the Bank of Canada continuing to increase rates in the near future as the word “gradual” was omitted from their recent release.
Additionally this week:
– Mustel Group and Sotheby’s International Realty Canada report: Despite rising housing costs, eight out of ten young, urban families in Canada’s key metropolitan areas would prefer to live in a detached single family home if money was no object.
– Urbanation: Average selling price of actively-marketing condo projects in Q3 2018 was $745/sqft, up 11% from 2017. For unsold units, asking prices gained 19% to $972/sqft. Average resale condominium prices grew by 6.5% year-over-year to $690/sqft, or $577,000.
– Bank of Canada: Total household credit was up just 3.6% in September from 2017, slowest annual growth since 1983. Slowdown from 5.8% in the middle of 2017, less than half the 8.1% historical average. The amount of household credit outstanding is now $2.15 trillion.
– CMHC: Markets in Toronto, Vancouver, Victoria and Hamilton are still considered to have a “high degree of overall vulnerability” even though house prices are getting more in line with housing market fundamentals such as income, mortgage rates and population.
– BILD: 1,747 new homes sold in September, up from August’s 974, with 1,494 new condos sold. Sales down 20% from 2017. Benchmark price for a new condo jumped 19.4% year-over-year to $789,643. Currently 8,820 condo units on the market, representing 5 months worth of inventory.
– Hopeful youngsters in the 25-34 age bracket now account for nearly half (49%) of Canada’s first-time buyers, according to the CMHC’s annual Mortgage Consumer Survey. Meanwhile, 40% of first-time buyers are married, while 22% are newcomers to Canada.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.