August 4th, 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:
– Statistics Canada: Economy has made up almost half of its historic contraction since the height of the pandemic. GDP expanded 4.5% in May. 5% estimate for June. Cumulatively, GDP has increased about 10% in the two months, after falling more than 18% in March and April.

– BILD: June sales of new single-family homes were 1,160 of 1,904 new homes sold, highest number of transactions for June since 2016. Still 12% below 10-year average. Sales for new condos at 744 which is up compared to April and May, but down 73% from 2019, 70% below 10-year avg.

– Urbanation Condominium Market Survey: New condo apartment sales reached 1,385 units in the GTA in Q2, a new low since the ‘Great Recession’ in Q1-2009, when just 885 units sold. On a year-over-year basis, new condo sales fell 85%.

– Zoocasa study: Number of rental and condo listings in downtown Toronto has grown at a pace significantly faster than the average across the city. Rental availability in the downtown area increased by 257% annually in June, compared to the 83% growth seen in the City of Toronto.

– Latest figures from Statistics Canada indicated that Canada’s annual inflation rate in June saw a near-decade-high increase to 0.7% from a 0.4% decline in May, in the wake of late-spring reopenings nationwide.

– Nanos Research poll: 60% of Ontarians “agree” or “somewhat agree” living in a rural area is more appealing now than before COVID-19. 61% either agreed or agreed somewhat with living in the suburbs has become more appealing. Only 34% said downtown living has grown more attractive.

 
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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