April 13th, 2021 Mortgage Industry Update

The Bank of Canada announced on March 10th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada suggests that they will more than likely keep rates at this “effective lower bound” until 2023, as they observe the full effects of the pandemic. Due to recent increased confidence in the markets, fixed rates have been slightly increasing. 

Additionally this week:

– TRREB: There were 15,652 property sales across the GTA in March, up 97% annually. Average selling price climbed 21.6% to $1,097,565. Active listings down 0.7%. Detached property sales surged 111.6% in the 905 region. Average selling price for detached homes in 905 up 31.4%.

– Royal LePage: Across Canada, average property prices in the recreational regions will increase 15% in 2021 to crest over $500,000. In 2020, the average price of a house in Canada’s recreational property regions increased 16% year-over-year to $437,156 compared to 2019.

– Canadian Home Builders Association: Cost of basic lumber like 2x4s has doubled since 2018. Adds tens of thousands of dollars of construction material cost to your new home, depending on the size. A typical 2,500 sq. ft. home, you’re over $30,000 in additional costs for lumber.

– Oxford Economics: Over the next 10 years, housing completions nationwide will total roughly 2.2 million units, far outpacing the formation of 1.9 million new households. This will help rebalance supply and demand in Canada’s housing market.

– Statistics Canada: Economy (GDP) grew 0.7% in January. Compares with a gain of 0.1% in December. Topped preliminary estimate of 0.5%. Was the ninth consecutive monthly increase since the pandemic. Total economic activity was still about 3% below the February level last year.

– Urbanation study: Average pre-construction unit that sold for $415,175 three to five years ago was worth 40% more last year — $595,614. Despite a 13% drop in condo rents last year, 63% of those new-construction investors managed a positive cash flow on their units.

 
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.

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