October 18th, 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:
– Statistics Canada: Total value of building permits in Canada increased by 11.9% in August to reach $12.5 billion. Strong gains were especially apparent in the residential segment, which saw an increase of 12% to reach $8.4 billion nationally.
– The minimum wage is now $15.50 in Ontario, $13 in Saskatchewan, $13.50 in Manitoba, $13.60 in Nova Scotia, $13.75 in New Brunswick and $13.70 in Newfoundland and Labrador.
– TRREB: September average prices of detached homes fell 10% year-over-year to $1,369,186, semi-detached properties dropped by 6.5% to $1,043,120 and townhouses edged down by almost 1% to $901,592. Condos, however, rose by roughly 3% to $730,818.
– TRREB: September home sales in GTA were down 10% from August, 44% annually. 11,237 new listings marked month’s lowest number for 20 years, down by nearly 17% over the same time last year. Benchmark price ($1.08 million), increased by 1% over August, but was 4.3% lower annually.
– Royal LePage survey asked if “the increased cost of living, including higher interest rates and inflation,” caused people to “postpone or deprioritize the purchase of a home since the beginning of 2022.” 29% of respondents between the ages of 18-34 answered ‘yes,’ 31% said ‘no’.
– Statistics Canada: In Q2 2022, annual net migration from Ontario – or total inflow of people from other provinces minus the outflow to other provinces – for those between 18 and 24 hit 13,900, over 40 times the number that left Ontario in 2018. Alberta seeing the biggest inflow.
– Statistics Canada: Landlords have taken occupation of almost half of Canada’s newly constructed homes in the past five years. Analysts found that deep-pocketed investors scooped up 90% of new real estate supply in January.
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.
