September 22nd Mortgage Industry Update
September 22nd, 2020 Mortgage Industry Update
The Bank of Canada announced on September 9th 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:
– CREA: Home sales in August climbed 6.2% compared with July to hit a record for the month at 58,645. Compared with 2019, sales were up 33.5%. The national average home price also set another record in August at more than $586,000, up 18.5% compared with 2019.
– Statistics Canada: Annual pace of inflation held steady in August as lower gasoline, air travel costs helped offset rising prices in other areas as businesses passed on costs related to operating during the pandemic. Rose 0.1% compared with 2019, matching 0.1% increase last month.
– Statistics Canada: Household debt service ratio in Canada shrank in first half of 2020; dropped from 14.54% to 12.40%; largest decline on record. Household debt as a proportion of disposable income fell from 175.4% to 158.2%., as household disposable income increased 10.8%.
– Rentals.ca report: The average rental price for one-bedroom apartments in the city was $2,013 in August. That’s a 1.3% dip in Toronto rent from July, and a 13.8% fall year-over-year. Two-bedroom apartments averaged $2,655, which is down 1.2% since July and 8.9% year-over-year.
– Statistics Canada: Commercial real estate rents across Canada down 3.1% in Q2 2020, when compared to Q1 rates. During Q1 rents had declined 0.2% over Q4 of 2019 as the first effects of the pandemic were being felt. On a year-over-year basis, rents dropped by 2% across Canada.
– CMHC: The annual pace of housing starts in August rose nearly 7% compared with July. Seasonally adjusted annual rate of housing starts was 262,396 units in August, up from 245,425 units in July. That’s the highest level of housing starts since 2007.
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.