October 11th, 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:
– Bank of Canada: Outstanding mortgage credit load reached a new record high of $2.04 trillion in July. This represented increases of 0.6% ($12.1 billion) monthly and 9.3% ($174.7 billion) annually. However, July’s monthly growth was the smallest since February.
– Statistics Canada: GDP increased in July by 0.1%, beating estimates for a 0.1% drop. Preliminary data show GDP was unchanged in August. Since April, growth has averaged just 0.1% on a monthly basis.
– CMHC plans to revamp its forecasts to call for a drop of as much as 15% in home prices, as higher mortgage rates threaten to cause a protracted slump in real estate. Said in July that national housing prices could slide 5% by mid-2023, compared with levels earlier this year.
– Statistics Canada: Population got younger for first time since 1971. Median age of people living in Canada in 2022 edged down to 41, the first decline in more than five decades. Median age had climbed steadily from 26.2 in 1971 to 41.1 last year as the population ages.
– RE/MAX Canada report: National average home sale price will fall 2.2% in the remaining months of the year. Soaring interest rates, sky-high inflation, global economic unrest and higher mortgage costs will continue to prevail. Prices in GTA are forecast to fall 6.3%.
– TorontoRentals.com: Average monthly rents in GTA spiked by 21% ($430) annually in August. Pushed average across all rental property types to $2,528. Rents have appreciated by 28.2% above the pandemic-era lows of early 2021. Increases apparent in every residential asset class.
– Statistics Canada: Canada’s population stood at 38.9 million as of July 1. Represents an increase of 284,982 people, or 0.7%, since April 1. This is the highest quarterly growth since 1949, and highest percentage growth since 1957. Immigration accounted for 94.5% of that growth.
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.
