October 4th, 2022 Mortgage Industry Update
The Bank of Canada announced on September 7th that its overnight lending rate will increase to 3.25% from 2.50%. The prime rate has increased to 5.45% from 4.70%. Inflation globally and in Canada continues to rise. Central banks around the world continue to tighten as well. The Bank of Canada suggests that they will more than likely continue to raise interest rates as necessary to tackle higher than anticipated inflation rates.
Additionally this week:
– Re/Max Canada forecasts the national average home sale price in Canada will fall 2.2% in the final months of the year. Greater Toronto Area is forecast to fall 6.3%. Seven out of the 30 markets analyzed are likely to experience modest price appreciation between 1.5-7%.
– Eckler Ltd: Canadian employers project the national average base salary to increase by 4.2% next year. British Columbia, Ontario and Quebec are projecting the highest average salary increases. Largest average salary increases are expected to be in the technology sector at 5.4%.
– BILD: The benchmark price of a new single-family home, hit $1.86 million in August, a 22% yearly increase. Sales were down 86% from 2021 and 87% below the 10 year average. Condo prices jumped 11% to $1.19 million. Sales were down 83% from 2021 and 61% below the 10 year average.
– Statistics Canada: Renting households rose 21.5% from 2011 to 2021, more than twice pace of increase in home ownership, up 8.4% in the same period. Growth in the rental rate reflected an increase in multi-family units as domestic economy looks to absorb high immigration rates.
– Statistics Canada: Job vacancies hit a record high in Q2 with 997,000, up 4.7% quarterly and 42.3% yearly. Vacancies rose in six provinces, led higher by Ontario’s 6.6%. Average hourly wages increased 4.1% yearly.
– Statistics Canada: Annual inflation rate was down again in August, falling to 7% as gas prices posted a noted decline. Last month’s decrease in the inflation rate was even greater than economists, who expected the rate to hit 7.3% on average, had anticipated.
– Rentals.ca: Average rent for all property types in August hit a three-year high of $1,959 per month, up 1.3% from July and 11.1% from 2021. Rents have now risen 16.8% since hitting a low of $1,676 in April 2021. Average rent prices have now eclipsed pre-pandemic levels.
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.