November 9th Mortgage Industry Update
November 9th, 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:
– BNN Bloomberg: Over the past year or so, most Canadians (59%) have been paying for home renovations out of own savings. Only 2% said that that they financed projects through home equity lines of credit. General lines of credit accounted for 11%, while credit cards were 7%.
– Statistics Canada: Gross domestic product was little changed in September. While the expansion was a less-than-expected 0.4 per cent in August. Overall for the third quarter, the economy grew by 0.5 per cent, or an annualized pace of around 2 per cent.
– Sotheby’s International Realty Canada fall market report: Residential real estate sales over $4M over July and August up 12% annually. Six properties over $10M sold, compared with just four in 2020. Sales of condos over $4M up 40%. Luxury single-family home sales over $4M up 15%.
– Statistics Canada: Gap between Canada’s rich and poor has continued to shrink this year. Difference between the wealthiest 20% and poorest 40% declined, as net worth for bottom two quintiles grew at faster rate, jumping by 41.8% compared with an 18.8% increase for the wealthiest.
– Oxford Economics: YYC and YEG were named among North America’s most affordable cities, with Calgary placing 9th and Edmonton 4th overall. Vancouver named the least affordable city in North America. “Affordability deteriorated in nearly all U.S. and Canadian metros” in Q2.
– Bank of Canada: Expecting global GDP to grow by 6.5% this year, 4.25% in 2022, and around 3.5% in 2023. Canadian GDP projected to be up by 5% this year, before moderating to 4.25% in 2022 and 3.75% in 2023. Overall expecting rate increases sometime in middle quarters of 2022 now.
– Canadian Bankers Association: As of July 31 there were only 9,157 mortgages in arrears out of total of 4.97 million residential mortgages in Canada. Amounts to 0.18% default rate. Traditionally rate is in 0.30% range. In Ontario, just 0.07% of mortgages were underwater.
– CMHC: In 2020 total market of mortgage debt held by MICs stood between $13-$14B, increased by 3.1% during this period. Rate was slower pace compared to rest of residential mortgage industry (7%). MICs’ share of all outstanding mortgages remains at around 1-2% of the whole market.
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.
