October 15th, 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:
– Royal LePage House Price Survey: Aggregate price of a home in Canada increased by 1.6% yearly to $815,500 in Q3. National home price experienced a 1.1% decline compared to the previous quarter, signalling sluggish summer sales across much of the country.
– Urbanation: Ontario average asking rents for purpose-built and condominium apartments down 4.3% annually to $2,380 in September. Toronto average rents declined 8.1% to $2,668.
– Urbanation: Average asking rents sat at $2,193 for September, marking 5th straight month annual rate has slowed from May’s 9%. Rents in Canada are increasing at their slowest pace in nearly three years. Asking rents for purpose-built rental apartments up 5.4% annually to $2,138.
– Government announces starting Jan 15 Canadians will be able to access up to 90% of their home’s value through default insured mortgage refinancing to build secondary suites and addition of a maximum of three additional units to existing homes. Total property value capped at $2M.
– RBC: BoC’s decision to reduce its key interest rate is making small affordability changes. Purchasing an average home priced at $810,200 required income of $155,000 in Q2 2024, down from $161,000 at end of 2023. In 2019 income of $96,000 would have sufficed to buy a similar home.
– Altus Group revealed that that the gap between housing stock and population growth in the GTA is the widest it has been in over 50 years. Also shows the region is seeing a serious decline in development applications, which foreshadows a further deterioration of housing supply.
– TRREB: 4,996 homes were sold last month in the GTA, up 8.5% annually. Sales were up from August on a seasonally adjusted basis as well. Average selling price was down 1% at $1,107,291. New listings last month totalled 18,089, up 10.5% from a year earlier.
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.
