March 7th, 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:
– Zoocasa: Average home prices in GTA have dropped down to levels seen over 16 months ago. The average price of a home in the GTA hit $1,078,900 in January, almost as low as the average sale price seen in September 2021 ($1,065,300).
– Statistics Canada: Real GDP was unchanged in Q4 2022 after five consecutive quarters of growth. Economy contracted by 0.1% in December. Preliminary estimates by StatsCan had predicted 1.6% annualized growth. The Bank of Canada had expected growth of 1.3%.
– According to a report from Royal LePage real estate, a home purchased in the GTA — outside of the city of Toronto proper — valued at about $1 million had three bedrooms, 2.2 bathrooms and 1,461 square feet of living space; this is 302 square feet less than the national average.
– OSFI: The value of loans secured by housing in Canada continued to go up with a 0.1% monthly uptick and a 9.6% increase to reach $308.9 billion in October. However, despite the surge, the monthly growth trend is showing some signs of a slowdown.
– FSRA reported that 10.6% of deals (amounting to 35,568) brokered by licensed mortgage brokers in 2021 were private mortgages. In Ontario, the dollar value of private mortgages brokered by licensed mortgage brokers surged by 72% from $13 billion in 2019 to $22.4 billion in 2021.
– TRREB: 20% of homebuyers in Peel Region got down payments for their homes as gifts from family or friends. 12% received money from parents, 5% from grandparents or other family members and 3% from friends. These results were identical across the wider GTA.
– CMHC’s new rental report found vacancy nationally fell to 1.9% with the average rent growing by 4.6% yearly. Nearly 69,000 new units completed and added to the Canadian market in 2022, a record high, while starts — at nearly 80,000 — were also at a historical high.
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.