May 11th, 2021 Mortgage Industry Update
The Bank of Canada announced on April 21st 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 the later half of 2022 now, as they observe the country’s faster than expected recovery from COVID-19.
Additionally this week:
– Statistics Canada: The Canadian economy grew at an annual rate of 6.5% through Q1. Preliminary estimate for Q1 was better than the contraction first forecasted months ago, but still represents a slowdown from the 9.6% annualized growth seen over the last three months of 2020.
– Borrowell: Average credit score in the country improved by 18 points in the past year, going up from the “below average” category to a “fair” score of 667 points. Missed payments during the same period decreased by 33%, from 3 missed payments per 10 consumers to just 2 payments.
– Canadian Housing Statistics Program report: Homeowners who own more than one home – in some cases, three or four, or more – is a growing group and is concentrated in Vancouver and Toronto. In the City of Toronto, 17 per cent of homeowners own two or more properties.
– The Canadian dollar broke above 81 cents U.S. Wednesday, hitting the highest level since February 2018 amid a broad-based rally in commodity prices and a divergence in expectations for interest rate increases in Canada and the United States.
– The Financial Accountability Office: Ontario’s bankruptcies dropped by 24% last year despite the start of the COVID-19 pandemic. High levels of government aid, low interest rates and lender payment deferrals all helped keep businesses and households from declaring bankruptcy.
– BILD: GTA saw a total of 5,003 new homes sold in March, which was up 27% annually and 37% higher than the 10-year average. Condo apartments represented the bulk of these sales, reaching its second strongest March performance on record.
– TRREB: Q1 condo sales in the Toronto metro area jumped to 9,398 units, marking an increase of 79.8% annually. New listings last quarter rose by 42.8% to 11,373 units. The overall GTA average condo price fell by 1.4% from last year’s levels to $645,219.
– BMO poll: A healthy number of first-time buyers (47%) plan on purchasing their first home in the suburbs. Regionally, this is highest for buyers in BC and Ontario (53% each). 44% of respondents cited affordability the central factor in their home purchasing plans.
– 2021 Scotiabank Housing Poll: 58% of Canadian homeowners are planning to renovate their current home in the next two years and one in four are looking to start in the next six months. Backyards are the most popular area at 33%, followed by bathrooms at 30% and kitchens at 28%.
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.Share this post on: Connect with us on: