April 7th, 2020 Mortgage Industry Update

The Bank of Canada held another emergency rate announcement on March 27th and cut its overnight lending rate from 0.75% to 0.25%. The prime rate has decreased to 2.45%. The possibility of further rate reductions remains unclear at this time as the economy deals with the COVID-19 pandemic.

Additionally this week:
– Realosophy Realty: Last week’s sales down 37% compared to 2019. 27% increase in cancelled listings. Some of those cancelled listings may end up getting relisted at a different price. New listings for the region fell by 33%. Average Toronto home price of roughly $856,000 is up 9%.

– According to the Canadian Bankers Association, more than 213,000 requests to defer or skip payments have been completed or are being processed since the announcement more than a week ago. The figure accounts for about 5% the banks’ total number of mortgages.

– BILD: The GTA saw its strongest February since 2004. There were 2,247 new single-family home transactions last month. A remarkable 228% higher than 2019, exceeded the 10-year average by 44%. New condo sales were at 2,418, up by 197% from 2019 and 48% above the 10-year average.

– Urbanation: Condo rents could decline by as much as five per cent this year, retreating to 2018 levels. That’s about $100 less than the current average of about $2,400 a month. Vacancy rates on the condo side of the market could also climb to three to four per cent.

– Sotheby’s International Realty Canada: GTA residential real estate sales over $1M during first two months of 2020 were up 107% from 2019, while luxury sales over $4M surged 75%. Gains recorded in $1M+ condo market (117%), attached home sales (52%) single-family home sales (115%).

– Angus Reid Institute survey: Nearly two thirds of Canadian households have lost work or anticipate losing work as a result of the COVID-19 outbreak, while 30% fear they may be late paying their rent or mortgage. Almost 1M Canadians joined the unemployment line.

 
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.

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