September 6th, 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:
– Statistics Canada: Average Toronto condo was about 970 sq ft in the 1960s and sat at roughly 1,100 sq ft between 1970 and 1990 before falling to 840 sq ft between 2001 and 2005. The average condo in the region was 750 sq ft around 2011, but by 2016, had dropped to 630 sq ft.
– TD Bank report: By the first quarter of 2023, the average home price across Canada could fall anywhere between 20% and 25% from its record high seen earlier this year. This would wipe out a significant chunk of the price gains seen over the past two or so years.
– Filings at OSFI showed that home equity line of credit outstanding balances went up by 0.6% monthly and by 2.9% annually in June, reaching $171.1 billion. Annual growth is the highest rate in nearly a decade. The 2.9% growth in June was the biggest since February 2013.
– Equifax: Canada’s total outstanding mortgage balance reached more than $1.635 trillion during Q2. Home equity lines of credit represented a significant chunk of the second-quarter numbers, totalling nearly $212.321 billion.
– Statistics Canada: Employers were looking to fill an all-time high of 1,037,900 jobs in June. It was the third straight month when vacant positions totalled more than one million, and a 3.2% increase from May. High job vacancies were seen in health care and social assistance.
– Statistics Canada new projection: Medium-growth scenario would mean there would be 4.2 million new residents in Ontario by 2043. Low end of growth projections showed there would be around 2.1 million new residents while high-growth scenario could result in 6.3 million new people.
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.