September 10th, 2024 Mortgage Industry Update
The Bank of Canada announced on September 4th that its overnight lending rate will be cut to 4.25% from 4.50%! This marks the third back to back rate cut! Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and other services are holding inflation up. The prime rate now decreases to 6.45%.
Additionally this week:
– Statistics Canada: Economy surprised analysts with better-than-expected growth in Q2. Overall GDP rose by 2.1% yearly in Q2, higher than the Bank of Canada had predicted and above expectations of analysts surveyed by Bloomberg. Marked an uptick from 1.8% between January and March.
– BILD: 654 new home sales in July, down 48% annually and 70% below 10-year average. Record monthly low. Condos accounted for 287 units sold in July, down 67% from July 2023 and 81% below the 10-year average. 367 single-family home sales down 1% annually, but 42% below 10 yr avg.
– TransUnion Credit Industry Insights Report revealed that Canada’s total credit debt surged to $2.41 trillion in the first quarter of 2024, up 3.2% from the previous year. Mortgages, which account for 74% of this debt, have remained relatively stable due to strong credit quality.
– By April 2024 only 3,400 waterfront properties were sold in Ontario compared to 6,199 the previous year — a decline of 40% and the lowest in more than two decades. Real estate experts saying now is the time to purchase that cottage you’ve had your eyes on – a good buyer’s market.
– Economists surveyed by Bloomberg forecasted central bank to lower its key overnight rate for third time in a row at its meeting on Sep 4, bringing it down to 4.25%. Bank anticipated to slash rates from the current 4.5% to 3% by July 2024. By 2026 rate could settle around 2.75%.
– Canada will restrict companies to recruit low-wage foreign labour after the government was criticized for letting it grow too quickly.mBusinesses are permitted to hire temporary foreign employees to fill low-wage jobs in 20% of their workforce. Limit will soon drop to 10%.
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.
