June 7th, 2022 Mortgage Industry Update
The Bank of Canada announced on June 1st that its overnight lending rate will increase to 1.50% from 1.00%. The prime rate has increased to 3.70% from 3.20%. Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food. Canadian economic activity is strong and the economy is clearly operating in excess demand. 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:
– Bank of Canada increases overnight rate to 1.50% from 1.00%. Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food. Canadian economic activity is strong and the economy is clearly operating in excess demand.
– Avison Young: Investment in GTA commercial real estate market remained elevated in Q1 2022 after record-setting annual and quarterly results in Q4 2021. Total sales of assets valued at $1M+ amounted to $7B; 9% lower than record-breaking Q4 2021, but 78% higher than Q1 2021.
– CIBC: Over $10 billion was gifted by Canadian parents to their children for down payments between October 2020 and 2021. In Toronto, Q1 2021 saw buyers who received assistance from their parents when buying for the first time receive an average of $130,000 from their parents.
– Altus Group: 3,645 units sold in April, down 29% yearly. Sale of new single-family homes was 54% below 10 yr avg, condos were 40% above. Benchmark price for new single-family homes in GTA was $1,787,186, while benchmark price for new condos was $1,189,134 this past April.
– Rentals.ca: Rent prices rose an average of 9% annually across country in April. Average monthly rent reached $1,821 in the month. Still shy of the pre-pandemic rent levels of around $1,845 in 2019 and 2020. Toronto and Vancouver saw average yearly increases of 17.2% and 23.7%.
– Statistics Canada: New home prices across Canada showed some signs of moderating from their average increase of 1.1% in the first three months of 2022, with just a 0.3% monthly increase in April. Price gains from March to April were observed in 10/27 CMAs. Went down in one CMA.
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.