July 26th, 2022 Mortgage Industry Update
The Bank of Canada announced on July 13th that its overnight lending rate will increase to 2.50% from 1.50%. The prime rate has increased to 4.70% from 3.70%. Inflation in Canada is higher and more persistent than the Bank originally expected and will likely remain around 8% in the next few months. 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:
– Urbanation: Average rental price per square foot in the GTA rose 5.9% quarter-over-quarter in Q2 to a new high of $2,533. As well, annual rental growth prices rose by a record pace of 16.7%. This is a record pace.
– TRREB: Average sale price for all dwelling types combined in Brampton continued its rapid decline in June. Showed an average price of $1,063,479; 22% decline since January when the average price peaked at $1,367,444. Steepest drops have come in the detached segment; $400,000.
– Statistics Canada: Number of homes being shared by multiple generations of a family, two or more families living together or one family living with people they may or may not be related to grew by 45% over the last 20 years. These households amounted to almost one million in 2021.
– CREA: Canadian home prices posted their largest monthly decrease since at least 2005 in June. National benchmark price of a home slipped by 1.9% monthly, most significant month-over-month drop in data going back 17 years and marking third consecutive month of price depreciation.
– Rentals.ca: Average rent in Canada took a breather in June, dropping slightly ($3) compared to May. The flat reading follows a 3.7% monthly increase in May. Average rents are still 9.5% higher than they were last year, but are down 3.5% compared to pre-pandemic June 2019.
– Royal LePage is forecasting that the aggregate price of a home in Canada will increase 5% in Q4, compared to the same quarter last year. That’s a large revision downward from April, when Royal LePage said it expected home prices to rise 15% this year.
– Royal LePage: The aggregate price of a home in Canada increased 12.1% yearly to $815,000 in Q2 2022. However it decreased 4.9% quarterly from the record yearly highs attained in Q1 2022.
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.