August 10th, 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:
– NBC report: During Q2 housing affordability has worsened by widest margin in 27 years. To save up for down payment for average home in Canada, would take 69 months if you saved at a rate of 10% of median pre-tax household income. Notable jump compared to the 57 months in 2020.
– Urbanation: 9,001 new condominium apartment sales took place in GTA in Q2. Marks the third highest quarterly total on record. Last quarter’s sales total was 5.5 times higher than the number of sales recorded during the same time period last year, 1,637 units.
– Statistics Canada: Residential construction costs spiked by 7.5% annually during Q2 of the year, considerably higher than the 4.9% increase seen in Q1 2021. Most substantial upswing in construction costs so far in its records. In Toronto year-over-year increases were 22.4%
– Urban Analytics: Apartment rents increased for first time in 18 months in Toronto during Q2. Average rents per sq foot increased 2% in Q1 to $3.12 per square foot at the end of June. Toronto rents had been falling from an average of about $3.65 a square foot near the end of 2019.
– Royal LePage survey: More than 10% of Canadians own at least 2 homes, with the share highest in the Greater Montreal Area (12%), the Greater Toronto Area (13%), and Greater Vancouver (14%). As much as 42% in Toronto said that they used equity from their primary residence to grow.
– Statistics Canada: Consumer Price Index rose 3.1 per cent in June from a year earlier, down from 3.6 per cent in May. On a monthly basis, the CPI jumped 0.3 per cent. The Bank of Canada’s core measures of inflation rose by an average of 2.2%, matching the annual gain in May.
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.