March 10th Mortgage Industry Update
March 10th, 2020 Mortgage Industry Update
The Bank of Canada announced on March 4th that it’s overnight lending rate will decrease from 1.75% to 1.25%. The prime rate has decreased to 3.45%. The common prediction currently stands that the Bank of Canada will likely either keep rates consistent for 2020, or the possibility of another rate drop sometime in the near future.
Additionally this week:
– Bank of Canada cuts its overnight rate target by 50 basis points from 1.75% to 1.25%! This was highly anticipated leading up to this week. Good news for any variable rate mortgage holders, we can expect rate decreases shortly!
– Canadian mortgage debt ripped to a new record high at the beginning of this year. The outstanding balance of mortgage credit reached $1.63 trillion in January, up 0.2% from a month before. This represents an increase of 5.1% when compared to the same month a year before.
– Ipsos poll: 53% of Canadians have engaged in some sort of financially risky behavior during the past year. Although down 2% compared to last year, the fact remains that 47% may be setting themselves up for a rude surprise over their household finances later down the road.
– Canadian GDP grew at pace of a mere 0.3% in Q4 2019. Virtually unchanged on quarterly basis, was within expectations set by economists and the Bank of Canada. Annual growth rate of Canadian real GDP was 1.6% for 2019. Lower than both the 2018 reading (2%) and U.S level (2.3%).
– Canada could potentially break the record for commercial real estate investment this year, hitting the $50 billion mark, according to the latest market outlook by CBRE.
– The Ontario Government has passed the Trust in Real Estate Service Act (TRESA) and new rules will reflect today’s changing housing market. OREA will continue to work closely with Government as they develop regulations for the Bill, work towards enacting the legislation into law.
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.