July 28th, 2020 Mortgage Industry Update
The Bank of Canada announced on July 15th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada has openly stated that it will more than likely keep rates at this “effective lower bound” for the immediate future until the effects of the pandemic are more clear.
Additionally this week:
– Statistics Canada: Investment in residential construction fell by 21.4% annually to $7.83 B nationally in May, despite significant 85.7% recovery from decade-low levels in April. Toronto at $1.51 B, representing a 24% decrease with May posting second lowest amount in 5 years.
– Nanos Research for OREA: 25% of Ontario renters who are active in the real estate market say they are more interested in buying a home now, compared to just 13% who say they are less interested, while 54% report they are just as interested now as they were pre-pandemic.
– StatsCan found that new house prices nationwide rose 0.1% from May 2020 and 1.3% from June 2019. New home prices in the St. Catharines-Niagara region saw the single largest monthly increase at 1%. Toronto was flat from May to June, with the Index rising only 0.2%.
– Savills Plc: Global real estate investment fell by 33% in first half as coronavirus pandemic battered economies and disrupted deals. Asia-Pacific region took biggest hit, with volumes down 45% from 2019. Investment down by 36% in the Americas, 19% in Europe, Middle East, Africa.
– CREA: Canadian home sales bounced back from pandemic levels, registering a 63% increase in June since May and 15.2% year-over-year. Canadian home sales fell 57% year-on-year in April, and 39% in May 2020. Detached home prices up 5.4% year-on-year, while condo prices up 5.5%.
– Rentals.ca’s July 2020 report: Average rent for a one-bedroom apartment listing in Toronto was $2,063, dropping 1.9% since May and 9.3% year-over-year. Listings for two-bedroom apartments climbed 1.3% since May to $2,684, though that figure is still down 4.4% from last year.
Stay tuned for the next update!
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