January 7th, 2020 Mortgage Industry Update
The Bank of Canada announced on December 4th that it’s overnight lending rate will remain at 1.75%. The prime rate remains 3.95%. The common prediction currently stands that the Bank of Canada will likely keep rates consistent into early 2020, with the next major move likely being a rate decrease.
Additionally this week:
– CMHC 2020 forecast: Ontario sales are expected to grow by 4.2% to 7.3%, or by 204,200 to 213,800 units this year. Prices are projected to see a larger increase at 5.4% to 6.5%, at an average of $614,000 – $633,700.
– Statistics Canada: Canada’s economy slightly shrank in October with real GDP edging down 0.1%. This marks the first decline in eight months. Economists had projected a flat GDP report for October compared with September, according to financial markets data firm Refinitiv.
– Statistics Canada: Influx of immigrants and non-permanent residents boosted Canada’s population by 0.6% (208,234) in Q3, biggest increase dating back to 1971. 83% of this due to international migration. New immigrants totaled 103,751, while non-permanent residents rose by 82,438.
– Statistics Canada: As of November, underlying inflation rose to 2.2%, from 1.9% a month prior. Mainly brought about by higher shelter and vehicle cost, and gain was on par with earlier predictions by economists. Core inflation also increased by 2.2%; was highest level since 2009.
– Bank of Canada governor Stephen Poloz has stated that the global economy appears poised for sustained – if slow – growth, and that low interest rates worldwide are likely to be the new normal.
– In the latest edition of its Resale Housing Market Forecast, the Canadian Real Estate Association predicted that the residential sector will enjoy sustained improvement into 2020, “with prices either continuing to rise or accelerating in many parts of Canada.”
Stay tuned for the next update!
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