January 14th, 2025 Mortgage Industry Update
The Bank of Canada announced on December 11th that its overnight lending rate will be cut to 3.25% from 3.75%! The second consecutive cut of 50 bps. Marks the fifth back to back rate cut! Inflation has dropped below the 2% target now. We can expect further decreases. The prime rate now decreases to 5.45%.
Additionally this week:
– RE/MAX Canada: Sales of homes priced $3M+ climbed 41% yearly in 2024. In Q4 2024 sales in the $3M+ range totalled 364, a sharp increase from 259 in the same period in 2023. Homes priced at $5M+ surged 59%, while those exceeding $7.5 million rose 41%.
– TRREB: 3,359 homes were sold last month, a 1.8% decline compared to 2023. 4,681 new listings throughout the GTA last month, up 20.2% annually. In the City of Toronto, there were 1,174 sales in December, a 6.7% decrease annually. For rest of GTA, home sales rose 1.1% to 2,185.
– TRREB: Annual 2024 home sales amounted to 67,610 — up 2.6% from 65,877 in 2023. New listings, at 166,121, were up by 16.4%. Average selling price for all home types was $1,117,600, which dropped less than 1% compared to 2023. Condos saw a drop of 2.6% to $702,000.
– Statistics Canada: As of September, outstanding HELOC balances totalled $170.8 billion, up 3% from last year. Marks highest level in nearly two years, and steady increase following declines throughout 2022 and early 2023. Balances still below their 2012 peak of over $199 billion.
– BMO Real Financial Progress Index: 30% of Canadians intend to cut back on spending in 2025 as the cost-of-living continues to climb. 46% of respondents said the rising cost-of-living had impacted their financial resolutions for the new year, marking a 4% increase from 2023.
– CMHC: Supply of purpose-built rental apartments reached its highest growth rate in over three decades. 4.1% increase in rental apartments in 2024 helped push national vacancy rate up to 2.2% from 1.5% in 2023. National vacancy rate for rented condos held steady at 0.9%.
– Statistics Canada: Nation added 177,000 people in Q3, growing the population by 0.4% from Q2 and representing the slowest growth since early 2022. Trudeau’s crackdown on temporary immigration is starting to ease explosive population gains that strained housing and other services.
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.
