August 25th, 2020 Mortgage Industry Update

The Bank of Canada announced on July 15th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada has openly stated that it will more than likely keep rates at this “effective lower bound” for the immediate future until the effects of the pandemic are more clear.

Additionally this week:
– In a recent market report, Toronto-based brokerage Zoocasa found that condo rental listings grew by 45 percent year-over-year in the City of Toronto during Q2 2020. Meanwhile, the number of condos leased during the same period dropped by 25 percent.

– Better Dwelling: Canadian real estate prices have grown at nearly 3x the rate of any G7 country since 2005. Canada exhibited an astounding 88% upswing in benchmark real estate prices. For perspective, the next strongest increase during this period was Germany’s 32.3%.

– Canadian immigration plummeted by almost two thirds in Q2 as border restrictions remained in effect, threatening one of the country’s main drivers of economic growth. Accepted only 34,260 permanent residents in Q2. Compares with 94,275 in Q2 2019, representing a drop of 64%.

– CREA: 62,355 Canadian resale homes were sold via the MLS in July, creating a new record for the month. The July figure was 26% higher than June’s figure, 30.5% year-over-year. The average selling price in July was $571,500, an increase of 14.3% from the same level a year earlier.

– July report from Rentals.ca: Downtown Toronto condo rents peaked at $2,740 in August 2019. Current average fell 16% to $2,302. Rent for one-bedroom apartment at $2,063. 9.3% decline year-over-year; only 1.9% drop since June. Two-bedroom apartment up 1.3% since June to $2,684.

– In Toronto, 11,081 dwellings were sold in July, 29.5% increase over July 2019. Up by almost 28% from June 2020. Average housing prices climbed by 17% year-over-year. Total Toronto sales so far in 2020 still lag about 10% behind the 52,417 recorded in the first 7 months of 2019.

 
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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