August 22nd, 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:
– CREA: When it comes to people moving within Canada, Alberta looks like the place to be. More than 31,000 people arrived in the province from elsewhere in Canada — mostly B.C. and Ontario — in the first quarter of 2023. That is a rise of 44.7 per cent compared with last year.
– Colliers Canada: Office vacancy rates are expected to increase by as much as 15% by the end of 2024. Office vacancy across Canada has risen from approximately 8% to 14% since 2020, and could hit another peak in 2024 as companies lean toward using hybrid work models.
– CREA: Home sales across Canada were largely unchanged between June and July, falling marginally by 0.7% as year-over-year activity saw a significant jump. Number of new listings up by 5.6% monthly, average home prices ticked upwards by 1.1% monthly, but down 1.5% annually.
– Statistics Canada: Inflation rate increased to 3.3% in July. Rose last month after hitting 2.8% in June, with a smaller year-over-year decline in gasoline prices partly responsible for that uptick.
– Urbanation: Canadian July rent rates hit new record, with average asking rate growing by 8.9% annually to $2,078. Growth was fastest registered in Canada over last three months. 1.8% increase in average asking rents over June represented fastest monthly growth of past 8 months.
– CMHC: During Q1 2023, the average monthly payment on new mortgages in Canada was $1,984, up 40% from $1,415 in 2019. And the average monthly payment on existing mortgages during the same period of 2023 was $1,551, up 20% from $1,277 in 2019.
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.