December 8th, 2020 Mortgage Industry Update

The Bank of Canada announced on October 28th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada suggests that they will more than likely keep rates at this “effective lower bound” until 2023, as they observe the full effects of the pandemic. 

Additionally this week:
– TRREB: There were 8,766 property sales across the GTA last month, a 24.3% increase from 2019, but a 17% drop from last month. The average home price across the GTA reached $955,615, up 13.3% from 2019, but a drop from October’s record-setting average of $968,318.

– Re/MAX is forecasting a 6% increase in Toronto home prices next year after a “wild ride” in 2020. Home prices rose 12% on average to $918,883 (about $100k above last year) in the first 10 months of this year compared to 2019. Average price will climb to $974,015 by end of 2021.

– The federal government has plans to implement a foreign buyers tax in order to help make the national housing market more accessible for Canadians. The new measure was announced in the Trudeau government’s Fall Economic Statement 2020.

– Statistics Canada: Gross domestic product rose by an annualized 40.5% in the July to September period, erasing much of the record 38.1% drop in the second quarter. Economists were predicting a 48% increase. The rebound brings total output to 95% of pre-pandemic levels.

– Royal LePage report: Home prices are increasing in Canada’s cottage country as more buyers look to move there full-time. Prices of single-family recreational homes rose 11.5% to an aggregate of $453,046 in the first nine months of the year, the real estate brokerage said.

– Equifax report: Consumer debt in Canada rose 3.8% in Q3 to $2.041 trillion, driven by the surging housing market and new auto loans. Mortgage balances were up 6.6% from the year before and the average new mortgage loan rose 8.6% to exceed $300,000 for the first time ever.

 
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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