May 9th, 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:
– Statistics Canada: Economy grew 0.1 per cent in February from January; less than expected. Analysts had forecast a 0.2 per cent rise from an upwardly revised 0.6 per cent growth in January. March GDP was most likely down 0.1 per cent, said in a preliminary estimate.
– Generation X is now the top buyer of recreational property in Canada, with this demographic driving activity in 91% of recreational regions surveyed, according to RE/MAX Canada’s 2023 Cottage Trends Report.
– BILD: Region’s new home segment rallied in March, with 1,277 sales recorded. Although that figure is up 38.5% from February, it’s also down 70% from March 2022 and 65% below the 10-year average. Condominium apartments accounted for more than half of March’s total sales.
– The average rent for all available property listings rose to $2,004 in April, according to Rentals(.)ca’s latest rent report. This is the first month-over-month rent increase since November. Rents are now up 10.8% compared to April 2022, and up 1% in the past month alone.
– Mortgage insurers reporting higher levels of loans with very high LTVs (95%+) in Q4 2022. Canada Guaranty now at $4B (0.74% of its outstanding insured mortgages), up from $532M in Q1. Sagen now at $14B, or 10% of total, up from $7B. CMHC at $5B, or 2.8% of total, up from $2.3B.
– The Teranet-National Bank House Price Index, an independently developed representation of average home price changes in 11 metropolitan areas across Canada, fell by 6.9 per cent from March 2022 and March 2023. In Toronto, the price index was down 12.1 per cent.
– Urbanation: Q1 average rate for purpose-built rentals edging up to $3,002. Average for purpose-built rentals is up 13.8% based on units that turned over in Q1-2023 and relative to the same quarter in 2022. Rents are inflating at a slower pace compared to Q4-2022.
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.
