August 3rd, 2021 Mortgage Industry Update

The Bank of Canada announced on July 14th 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: New home sales (24,060) in GTA in first six months of 2021 are up 25% over 10 year average, totalling almost 2/3 of all GTA new home sales in 2020. 3,860 units sold in June, up 4% from 10 year average, above the 3,632 in June 2019, after a dip in June 2020 below 2,000.

– Canadian Bankers Association: 4,948,248 mortgages in April. This represented a 0.5% monthly increase (23,649 mortgages), and a 2.5% annual upswing (121,500 mortgages) making it highest in half decade. Outstanding mortgagesposted an annual growth rate of 7.8%, highest since 2010.

– Teranet National Bank composite price index: Canadian home prices increased 16% annually in June to mark the largest 12-month gain on record. Prices up 10% or more in an unprecedented 90% of 32 urban markets. Index rose 2.7% from May for the 20th consecutive monthly increase.

– Number of new immigrants arriving into the country in 2020 plummeted to just 184,000, way off the government’s target of 341,000, and the lowest total since 1998. Government announces plans to welcome 401,000 this year, followed by 411,000 in 2022 and 421,000 in 2023.

– Oxford Economics: House prices in richest nations may be overvalued by 10% after a decade-long boom that’s one of strongest since 1900. Netherlands, Canada, Sweden, Germany, France most risky property markets. Estimates values across 14 advanced economies have rise 43% in 10 yrs.

– Re/Max: One in three Canadians homebuyers said they are considering so-called “workarounds” in order to buy a home. That includes renting out portion of their primary residence, pooling finances with friends/family, or even living in a shared space with neighbours.

– Statistics Canada: Total household borrowing rose by 0.8% for 2nd straight month to over $2.5 trillion in May. Mortgage debt, home equity lines of credit accounted for $1.98 trillion of total, rose by $16.3 billion. Total mortgage debt was up 1.0% from April, and 8.3% annually.

 
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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