June 1st, 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:
– BILD: Condos comprised 3,619 new home sales in the GTA in April. This was the highest number of new condos sold in the GTA for the month of April, exceeded 10-year average by 69%. New single-family home sales totalled only 1,020 transactions, roughly 26% below 10-year average.
– Oxford Economics: Vancouver, Toronto and Hamilton are the least affordable cities in North America. Vancouver was the least affordable city, with Toronto in second place and Hamilton in third. All three are more expensive places to live than New York and L.A.
– RE/MAX study: Interest and activity in Canada’s suburban and rural recreational properties continues to accelerate, with average sale prices likely to grow by as much as 25%. Also 21% of Canadians are considering recreational properties after being priced out of urban markets.
– OSFI: Effective June 1 new qualifying rate for uninsured, insured mortgages will rise to either mortgage contract rate plus 200 basis points or 5.25%, whichever is higher. Currently, the stress test is set at the mortgage rate plus 200 basis points or 4.79%, whichever is higher.
– KPMG survey: Most workers in Canada want to return to the office, but about three quarters prefer a “hybrid” model that allows some flexibility to work remotely. Half of respondents said they’re more productive and effective in a virtual work environment.
– Almost 45 per cent of Canadians say they think the economy will be stronger in the next six months, according to polling by Nanos Research Group for Bloomberg News. That’s the highest reading since 2009, lifting the overall confidence index to a record of 64.6.
– TD survey: 32% of Canadians are willing to take part in a bidding war in order to secure their dream home. 51% of young adults under 35 are prepared to offer above list price, while 31% between 35 and 54, and just 18% of those 55 and older, are willing to do the same.
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.