October 24th, 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:
– Angus Reid Institute poll In recent months, approximately 15% of Canadians found servicing their mortgage payments “very difficult”. This was a rate twice as high as that seen back in March.
– Sotheby’s International Realty Canada: Residential real estate transactions over $4M jumped 37% yearly from July 1–Aug. 31 with single-family homes driving the change.
– Ottawa is asking Canada’s largest lenders to reduce banking fees and help borrowers cope with higher mortgage costs, as Canadians grapple with high inflation and mounting expenses. Finance Minister Chrystia Freeland said during a news conference.
– Statistics Canada: National inflation rate ticked down slightly in September, falling to 3.8% compared with a 4% reading the previous month. Driven mainly by lower grocery prices and costs of durable goods and travel-related services – although price of gas surged, spiking 7.5%.
– Canada’s banking regulator (OSFI) has revealed its decision on initial public consultation regarding its B-20 guidelines, indicating in a statement that it will not tighten regulatory limits on debt-service coverage.
– CREA expected 449,614 residential properties to change hands by the end of the year; decline of 9.8% from 2022. National average home price forecasted to decline by 3.3% on annual basis, reaching $680,686 in 2023. Also expected to regain 1.5% from 2023 to 2024, reaching $690,916.
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.
