June 20th, 2023 Mortgage Industry Update
The Bank of Canada announced on June 7th that its overnight lending rate will increase to 4.75%. Inflation in Canada increased surprisingly last month along with strong job and GDP numbers. The latest data remains in line with the expectation that inflation will come down to around 3% shortly. The prime rate increases to 6.95%.
Additionally this week:
– Statistics Canada: From 2019 to 2021, housing stock growth consistently outpaced rate of population increase in largest cities. Growth in Toronto (1.3%) and Vancouver (2.1%) was outstripped by addition of 61,320 units in Toronto (3.5% gain) and 28,085 units in Vancouver (up 3.6%).
– Rentals.ca: Canadian rents appreciated just 6.5% year over year in May, marking slowest rate of annual rent appreciation since December 2021, or in 17 months. National average (at $2,014) last month, grew 0.6% between April to May and was up 19% over past two years.
– Statistics Canada: National unemployment rate ticked upwards for first time in 9 months. Rate last month hit 5.2%; slight increase from April in its first monthly jump since August 2022. Meanwhile, the economy unexpectedly culled 17,300 jobs in May. Expected a net 23,200-job gain.
– Rentals.ca report: The average rental property in Canada cost around $1,662 in April 2021, but the average price to rent is now around $2,002 as of April 2023. This is 9.6 per cent higher than the same time period last year as well.
– Equifax says new mortgage originations dropped 42 per cent in the first quarter of 2023 compared with a year ago, the lowest volume since 2014. The average loan amount was down 13.9 per cent year-over-year but only 2.9 per cent from the previous quarter.
– According to a CIBC survey, owning property remains a top goal for 71% of non-homeowners, although the majority of renters (64%) and current mortgage holders (82%) are concerned about how inflation and rising rates will affect their ability to keep up with costs.
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.
