October 10th, 2023 Mortgage Industry Update
The Bank of Canada announced on September 6th that its overnight lending rate will remain at 5.00%. The Canadian economy has now entered a period of weaker growth. CPI inflation is forecast to hover around 3% for the next year before gradually declining to 2% in the middle of 2025. Prime remains at 7.20%.
Additionally this week:
– National economy posted growth of just 0.1% in August despite rebounding slightly, a sluggish performance that strengthens case for Bank of Canada to maintain its pause on interest rate hikes. Sign that economy continues to soften largely in line with central bank expectations.
– Statistics Canada: Job vacancies declined by 43,100 (representing a 5.8% drop) to 701,300 in July, continuing a steady downward trend since June 2022. July’s job vacancies level was the lowest since May 2021 (673,400). On annual basis, job vacancies fell by 273,700 (down 28.1%).
– Canada’s population grew by highest rate in single year since 1957 as number of temporary workers, foreign students and immigrants surged. Population rose 2.9% in 12-month period ending July 1, one of the world’s fastest growth rates, bringing the number of residents to 40.1 M.
– Dye & Durham Limited report: While many Canadians prefer to wait and see until purchase prices (24%) and/or interest rates (23%) decline, 10% of respondents said that they are expecting to sell their primary residence and purchase a new one in the next year.
– Urbanation: Asking rents between May and August in Canada increased by 5.1%, or an average of $103 per month. In Toronto, the average rent of newly-listed one-bedroom properties was $2,620, while two-bedroom units averaged $3,413.
– UBS Global Real Estate Bubble Index 2023: Toronto, Vancouver, Frankfurt, Munich, Hong Kong, Amsterdam, and Tel Aviv—the cities that used to be in the bubble risk zone—are now in the overvalued territory. Only two cities remain in the bubble risk category: Zurich and Tokyo.
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.