May 18th Mortgage Industry Update
May 18th, 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:
– JLL: The office vacancy rate in the downtown core rose to 8.4 per cent in the first quarter – up from 5.1 per cent in the prior quarter. On the other hand, industrial vacancy rates have remained below the two per cent mark for ten straight quarters.
– Statistics Canada: Government-enforced restrictions across various provinces in April blew out job gains from previous months as the third wave worsened. Nationally, employment fell by 1.1%, a loss of 207,000 jobs, while unemployment increased by 0.6 points to 8.1%.
– CMHC says average home price could rise by as much as 14% this year, pace of sales could moderate by the end of 2023 if broad immunity to COVID-19 is soon achieved. Prices across the country could soar to as much as $649,400 by end of year and reach as high as $704,900 in 2023.
– Scotiabank survey: Canadians developed positive financial tendencies during COVID-19 and plan to continue upholding these habits. 36% are planning to eliminate unnecessary spending from their lifestyle after COVID-19 and 28% will continue to build emergency savings fund.
– TRREB: There were 13,663 property sales across GTA in April, up 362% annually (was pandemic start). However down 13% from March. Prices up 33% annually to $1,090,992, slightly down from March though. Average price of detached home in City of Toronto down 3% to $1,699,756.
– First-Time Home Buyer Incentive modified to maximum household income of $150,000 (an increase from $120,000). Participants can borrow up to 4.5 times their household income, up from the current four times. Can now theoretically qualify for a purchase price up to $722,000.
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.