April 25th, 2023 Mortgage Industry Update
The Bank of Canada announced on April 12th that its overnight lending rate will remain at 4.50%. This was the second hold-still since they started increasing rates a year ago. Inflation has started to lower. Latest data remains in line with the expectation that inflation will come down to around 3% in the middle of this year. Prime remains at 6.70%.
Additionally this week:
– Although it was still down 9.2% from the record-high seen a year ago, the aggregate price of a home in Canada rose 2.8% quarter over quarter in Q1 2023, to $778,300, according to the latest Royal LePage House Price Survey.
– Urbanation National Rent Report: Average asking rent for all property types nationwide up 10.8% annually in March to $2,004. 1% monthly increase – first growth since November. Toronto average monthly rent at $2,506 for one-bedrooms (up 22.2%) and $3,286 for two beds (up 19.7%).
– Rider Levett Bucknall Crane Index: Toronto has nearly 200 more cranes dotting its skyline than 14 other major North American cities (at 238 total as of Q1). Highest out of the 14 cities included on the index. Second place is Seattle at 51 cranes. Third place is LA at 47 cranes.
– Equifax: Canadian mortgage activity in Q4 2022 declined by 38.5% annually. Toronto and Vancouver originations down by 44.3% and 52.3% respectively. Average mortgage sizes dropped during the same period, particularly in Toronto (down by $51,000) and Vancouver (down by $36,000).
– RBC’s annual Home Ownership Poll: 53% of parents and other close family members now less willing to help their children or other relatives with down payments. Only 22% would give an immediate family member or their child money for a new home, a 4-point decline from last year.
– GTA Rent Report from liv.rent: Unfurnished one-bedroom unit in City of Toronto now costs average of $2,236/month; 1.05% monthly increase from March and 25.9% yearly jump. Price of furnished one-bedroom in the city rose even faster — at $2,582, the figure is up 7.24% from March.
– RBC Home Ownership Poll: Only 37% of Canadians have reported saying that the current market favours sellers, a significant drop from the 71% share in in 2022. Fully 40% of respondents said that they expect to pay less for a home now than they would have a year ago.
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.