December 21st Mortgage Industry Update
December 21st, 2021 Mortgage Industry Update
The Bank of Canada announced on December 8th 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:
– Statistics Canada: Total volume of mortgages deferred by non-bank lenders dropped by approximately $1 billion (down 15%) from Q1 to reach $5.9 billion in Q2. Total number of mortgages deferred fell from approximately 100,000 in Q2 2020 to just 23,992 in Q2 of this year.
– Statistics Canada: In the 10-year period ending 2021, outstanding residential mortgage credit swelled by 71.5%, far outstripping the GDP increase of 39.3%. Similar trend has been observed in overall mortgage debt, which has reached nearly three-quarters of GDP (71% as of Q2).
– The former CEO of the Canada Mortgage and Housing Corporation (Evan Siddall) says the many factors contributing to Canada’s increasingly hot housing market, while notable, aren’t cumulating in a housing bubble.
– Statistics Canada: In Q2 mortgages provided by non-bank lenders totalled $72.1 billion, 50.5% higher on an annual basis. The value of mortgages outstanding held by non-bank mortgage lenders as of the end of Q2 amounted to $346.6 billion, up by 4.7% year over year.
– TRREB: 9,017 homes changed hands last month, up 3% from 8,728 during 2020. Average home price in the region stretched to $1,163,323, 22% jump from $955,889. New listings fell 13% to 10,036 from 11,556. Average condo price reached $715,104, while detached homes at $1.5 million.
– Statistics Canada: Total value of building permits in Canada grew to $10.3 billion in October (up 1.3% annually) despite a slight decline (0.1%) in residential construction intentions. The value of single-family home permits grew by 10.8% in October, impelled by Ontario (+15.1%).
– Sotheby’s reports that residential properties sold for $4M+ rose 12% year-over-year in July and August 2021, and between September 1-15, sales up 33% from 2020. Luxury condos that sold for more than $4 million were up 40% year over year during the summer of 2021.
– Equifax: Canada’s total consumer debt load reached a new record high of $2.2 trillion during Q3. Represented 7.8% annual increase in consumer debt, pushing the average per capita debt load to $20,739. New mortgage growth this quarter moderated to a 7.7% year-over-year increase.
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.
