November 29th, 2022 Mortgage Industry Update
The Bank of Canada announced on October 26th that its overnight lending rate will increase to 3.75% from 3.25%. Inflation globally and in Canada continues to rise. Central banks around the world continue to tighten as well. The prime rate has increased to 5.95% from 5.45%. 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:
– BILD: October sales of pre-construction and newly built houses and condos was down 53% yearly — lowest for that month since 2008. But last month’s 2,007 sales, including 1,601 condos and 407 single-family homes, was higher than September’s historic low of 334 houses and condos.
– Rentals.ca: The average price for a two-bedroom apartment or condo rental in Toronto rose 24 per cent to $3,353 in October from a year earlier. One-bedroom rentals also rose 24 per cent to $2,502. Toronto saw the fastest growth of any large market in Canada over the past year.
– Q3 2022 saw Canadian mortgage lenders writing off the largest level of mortgages in nearly a decade. The average mortgage loss reached $96,000 in Q3 2022 – a 17% spike from the previous quarter and an even more staggering 68.4% rise from the same period last year.
– Urbanation: The average rent in October across Canada was $1,976, across all types of properties, from bachelor apartments all the way to three-bedrooms. That’s an increase of 11.9 per cent, well ahead of Canada’s inflation rate of 6.9 per cent.
– Statistics Canada says mortgage interest costs rose by 11.4 per cent on a year-over-year basis in October – the largest increase since Feb. 1991 when it rose by 11.7 per cent.
– Generation Squeeze survey: The majority of Canadian residents are not opposed to an additional tax on residential properties valued higher than $1 million amid elevated prices. Around 62% of Canadian homeowners indicated that they would support a “modest surtax” on such homes.
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.