November 2nd Mortgage Industry Update
November 2nd, 2021 Mortgage Industry Update
The Bank of Canada announced on October 28th 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 mid 2022 now, as compared to initially saying late 2022.
Additionally this week:
– Bank of Canada stands still on the overnight rate at 0.25%. Good news for variable rate mortgage holders as there is no expected change in prime rates!
– CIBC: For those parents who choose to assist their adult kids with purchase of a home, average amount of financial gift has risen to $82,000. Amounts to an estimated $10 billion in down payment assistance from parents over the past year, accounting for 10% of total down payments.
– Zoocasa new market analysis: Average list price in Toronto last month was $1.191 million, while the average sales price was $1.107 million, amounting to a difference of -7.02%. The city’s sales-to-new-listings ratio stood at 56.09%.
– Urbanation: The overall vacancy rate among GTA purpose-built rental apartment buildings has dropped to 3% as of Q3 this year, down from 5.1% in Q2, and 6.4% in Q1. The annual average rent increase is now 1.7% to $2,389 for all unit sizes, or $3.30 per square foot.
– Equifax: Between June 2020-2021, rate of growth from those purchasing homes was highest among buyers who already own several homes. Canada saw 7.7% annual growth in consumers with three+ mortgages in Q2 2021 when compared to 2020, overall mortgage consumers increased by just 3.1%.
– CMHC: Canada’s mortgage market grew at its fastest pace in over 10 years in the first half of 2021. As of June, residential mortgage debt stood at $1.73 trillion; a 9.2% annual gain. Strongest growth seen in new uninsured mortgages; up 20%. Average loan amount up 22% to $358,000.
– Statistics Canada: Inflation exceeded the Bank of Canada’s control range for a sixth straight month. The consumer price index rose 4.4% in September annually. Highest reading since February 2003, exceeding consensus expectations of 4.3%. On monthly basis, inflation was up 0.2%.
– RBC Economics: Ontario drove most of the 0.9% month-over-month increase in sales nationwide in September, with the GTA’s 0.7% rise being a major contributor to this performance. The MLS home price index went up by 2.6% monthly in the GTA.
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.