August 8th, 2023 Mortgage Industry Update
The Bank of Canada announced on July 12th that its overnight lending rate will increase to 5.00%. The Canadian economy has been stronger than originally expected, with more momentum in demand. CPI inflation is forecast to hover around 3% for the next year before gradually declining to 2% in the middle of 2025. The prime rate increases to 7.20%.
Additionally this week:
– Urbanation: GTA new condo sales experienced slowest first half of the year since 2013. The period brought 6,727 in new condo sales, 59% below the sales seen during the same period of 2022. This year’s first half is 42% below the first half 10-year average of 11,516 units sold.
– Statistics Canada: Residential building construction costs grew by 1.9% in Q2, building on 1.8% increase seen during Q1. In analysis of 11 major metropolitan areas, annual and quarterly growth in construction costs for residential was strongest in Toronto (13% and 3.8%).
– TD Economics report warns that Canada’s housing supply gap could widen by 500,000 units within the next two years if immigration continues at its current pace. Over the past year, population grew by 1.2M people – more than double the pace seen in 2019 and the years preceding.
– Statistics Canada: Household debt reached a new record high of nearly $2.9 trillion in May. Household credit liabilities, including mortgage and non-mortgage debt, totalled $2.858 trillion during that month. This represented a 0.2% increase for the third straight month.
– Statistics Canada: The number of unfilled job positions fell 26,000 to 759,000 in May, the lowest level in two years. That’s down nearly a quarter from a peak of 1 million in the same month last year. Canada’s job vacancy rate also hit a two-year low, falling to 4.3%.
– Statistics Canada: The economy grew by 0.3% in May. This figure came in slightly lower than was expected. The modest growth is unlikely to hold, as preliminary estimates for June suggests the economy contracted by 0.2%.
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.