August 2nd, 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:
– Sotheby’s International Realty Canada: By the first half of 2022, residential sales priced $1M+ sank 10% in the GTA. Even as the market gradually came into balance, GTA residential real estate sales $4M+ were up 7% yearly from previous records set in the first half of 2021.
– Avison Young measured daily foot traffic in downtown cores across North America using anonymized phone data. Found a sharp rise in foot traffic starting from April. No other city came close to Toronto which saw an impressive 83% surge in its downtown core over the same period.
– There was no room left for misinterpretation when Bank of Canada governor Tiff Macklem said the inflation rate would likely remain “painfully high” for the rest of 2022. Said in an interview with CTV News that the inflation rate would likely start with a seven until December.
– RE/MAX Canada: The majority of Canadians are willing to relocate if it means they can afford a home elsewhere. More than 50% of those open to relocating said they would travel for more than 100km just to attain homeownership. 29% would split homeownership with family or friends.
– In a first of its kind, Borrowell is launching a program that empowers renters to build credit history using their monthly home rent payments without the participation of the landlord. To get started, renters will have to sign up to Borrowell for a monthly subscription fee of $5.
– Statistics Canada: Inflation accelerated in June to highest level since January 1983, maintaining pressure on the Bank of Canada to continue delivering aggressive interest rate hikes. Rose 8.1% annually. Increased 0.7% from a month earlier. Both numbers were lower than expected.
– Strata: Cancelled condo listings across the GTA spiked by 643% since the start of the year. The number of terminated listings jumped from 380 in January to 2,822 in June, which represents the 643% increase in the past six months.
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.