February 14th, 2023 Mortgage Industry Update
The Bank of Canada announced on January 25th that its overnight lending rate will increase to 4.50% from 4.25%. Inflation globally and in Canada continues to remain high. Central banks around the world continue to tighten as well. Our economy remains in excess demand, however there is indication we are nearing the end. The prime rate has increased to 6.70%.
Additionally this week:
– FSRA: In 2019, the dollar value of private mortgages issued by licensed mortgage brokers in Ontario alone was $13B, or 9.3% of the overall market. By 2021 (the latest data available), private mortgages grew to $22.4B, or 12.3% of the overall market in the province.
– StatsCan: During the decade ending Oct 2020, share of investors among Canadian homeowners ranged from 20.2% in Ontario to 31.5% in Nova Scotia. Also strong investor presence in Manitoba (20.4%), BC (23.3%), NB (29%). Majority of these owned by investors living in same province.
– National Bank of Canada: Between 73% and 80% of variable-rate mortgage holders with fixed payments have hit their trigger rate, depending on when the mortgage was originated between 2020 and 2022. For before 2020, the proportion that have hit their trigger rate was 63%.
– TRREB: January saw 3,100 home sales in GTA, in line with the 3,110 from December; lowest number since April 2020. Average selling price of just under $1.04 million was down slightly from the previous month. The benchmark price was down 14 per cent from a year earlier however.
– NerdWallet: Owning a home is priority for 67% of Canadians and 43% stated they are looking to buy a property within the next five years. Despite the optimism, Canadians face a number of barriers such as a rising interest rate environment and high home prices, the report said.
– TRREB: The number of condominium apartment rental transactions reported through MLS was down on a year-over-year basis by 19.9 per cent in the fourth quarter of 2022. The number of rental listings was also down over the same period, but by a lesser annual rate of 11.8 per cent.
– 39% of Canadians are postponing or reducing the scope of their renovation plans for more than a year, with affordability concerns the main reason, according to a recent study by point-of-sale home improvement financer FinanceIt.
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.
