December 4th, 2018 Mortgage Industry Update
The Bank of Canada announced on October 24th that it’s overnight lending rate will increase to 1.75% from 1.50%. The prime rate increases from 3.70% to 3.95%. The common prediction currently stands at the Bank of Canada continuing to increase rates in the near future as the word “gradual” was omitted from their recent release.
Additionally this week:
– C.D. Howe Institute’s Monetary Policy Council: Bank of Canada should hold put on interest rates until spring. Calling for a hold-steady at 1.75% in December and January, with the next rate rise taking place by May 2019 (2%) and then a further rise by the end of 2019 to 2.25%.
– Vancouver says it will collect $38M for the first year of the empty-homes tax, with $21M having already been collected. Out of the total of 186,043 properties, 178,120 were occupied, 5,385 were exempt and 2,538 were vacant.
– CMHC: Canada’s overall vacancy rate dropped for a second year in a row, as demand for rental housing grew at a faster pace than supply. Now the vacancy rate is 2.4%, down from 3% in 2017. 37k new purpose-built apartments were added across Canada this year, demand increased by 50k.
– BILD: 2,805 condominium apartments sold in October, down 44% from 2017 but only 1% below 10 yr average. Single family homes = no change from 2017, down 64% from 10 yr avg. Benchmark price of new condos up 14.5% from 2017 to $775,537. Single family homes down 8.4% to $1,115,824.
– Global News: Criminal networks could have used BC’s real estate market for more than $1B money laundering. Linked to 10% of the 1,200 luxury real estate purchases in Lower Mainland included in a police study in 2016. 95% of around 120 confirmed properties linked to Chinese crime.
– CMHC study: In the GTA “the cost of longer commutes can completely offset the savings from moving to more affordable municipalities.” Essentially moving to the suburbs to save on housing is largely offset (sometimes even negative) by the cost of committing to the Toronto core.
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.Share this post on: Connect with us on: