July 6th, 2021 Mortgage Industry Update
The Bank of Canada announced on June 9th 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:
– RBC affordability measure, which charts ownership costs to household income, climbed 0.9 percentage points for Canada in Q1 2021 to 52%, the third straight increase. Average buyers must now spend 52% of their income to cover costs of a typical home; highest it’s been since 1990.
– TorontoRentals.com: Average rental rate per square foot in the GTA for all property types rose to $1,999 in May, up $22 from the previous month. Rental rates in the city rose 2.2% since January to $2.80. The increase indicates rates may have hit a bottom in Q1 2021.
– CBRE says Canada has North America’s four tightest downtown office markets with Vancouver’s vacancy at 6.6%, Toronto at 10%, Ottawa at 10.6%, Montreal at 11.1%. Prime industrial real estate is in high demand, with Waterloo Region having the lowest industrial availability at 0.9%.
– TREB: Overall 16.8% drop in rental prices; before the pandemic, one-bedroom apartments rented for an average of $2,187. Two-bedroom units now go for $2,447 per month on average, compared to $2,812 a year ago. Vacancy rates in Q1 increased to 8.8% in the city, and 6.6% for the GTA.
– Edge Realty Analytics: At today’s average rates, 61% of a new homebuyer’s very first mortgage payment is going towards principal repayment. In the early 2000s, that percentage was 26.5%. In the 1990s, it was 11.9%. In the 1980s it was a very minuscule 4.6%.
– RBC Small Business Poll: 55% of Canadians said they have thought about owning a business – highest level since 2017. 41% of aspiring entrepreneurs has said the pandemic has made them more likely to want to start a business. 58% believe the pandemic has created new opportunities.
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: