April 19th, 2022 Mortgage Industry Update
The Bank of Canada announced on April 13th that its overnight lending rate will increase to 1.00% from 0.50%. The prime rate has increased to 3.20% from 2.70%. Canadian growth is strong and the economy is moving into excess demand. Labour markets are tight, and wage growth is back to its pre-pandemic pace. The Bank of Canada suggests that they will more than likely continue to raise interest rates over this year to tackle higher than anticipated inflation rates.
Additionally this week:
– Statistics Canada: Roughly 3/10 residential homes in Canada are owned by individuals who own multiple properties. While the top 10% wealthiest owners account for around 25% of residential housing value. In Ontario they represent 15.1% of owners and held 31.1% of property.
– In its 2022 Small Markets Report, RE/MAX found that approximately 28% of homeowners living in larger markets would like to move to a smaller market within the next two years. RE/MAX defined a “small market” as a region with a population lower than 440,000.
– Bank of Canada: Growth looks to have been stronger in Q1 than projected and is likely to pick up in Q2. Canada’s economy likely to grow by 4¼% this year before slowing to 3¼% in 2023 and 2¼% in 2024. Inflation is now expected to average almost 6% in the first half of 2022.
– Statistics Canada: Average wealth of the youngest homeowner age group (main income earner younger than 35) dropped by 1.4% in Q4 2021. First time since pandemic began. Those aged 35+ who make the highest income in their household increased their wealth by 0.8% on average.
– CBRE: The number of available office spaces in Canada increased for the eighth straight quarter this year. The national office vacancy rate was 16.3% in the first three months of 2022. This is the highest rate since it dropped in the first quarter of 2020 when it was 11%.
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.