January 9th, 2018 Mortgage Industry Update

The Bank of Canada announced on December 6th that it’s overnight lending rate will remain at 1.00%. The prime rate remains the same. It is common prediction for rates to rise another 2 times by the end of 2018. Most fixed rates have now stabilized in the 3%+ range.

Additionally this week:
– CIBC poll: Settling debts remains the top financial priority for Canadian consumers in 2018. This represented the eighth consecutive year that paying off existing debts has topped the list in the annual survey.

– The most recent Bloomberg-Nanos consumer confidence index — a weekly poll of Canadian consumer confidence — hit 62.17, the highest level since 2009’s 62.92. A score over 50 indicates a positive feeling about the economy.

– TREB: Benchmark home price index fell in December for the seventh consecutive month, down 0.2 percent from November. Has fallen 8.9 percent since May — the largest seven-month decline in the history of data going back to 2000.

– BILD: 3,473 sales of new homes in GTA in November. Condos made up 91% of the sales (3,161 units) and were 28% above the 10-year average but 8% down from November 2016. Sales of new single-family homes plummeted 82% year-over-year to just 312 units, 76% below the 10-year average.

– Statistics Canada: Non-residents of Canada own less than 5% of the housing in the Greater Toronto and Greater Vancouver areas. 7.9% of the condominiums in Vancouver and 7.2% in Toronto.

– Home prices are expected to grow by just 1.9 per cent in 2018 after a gain of 8.5 per cent in 2017, according to a Reuters poll of analysts. Home price inflation is expected to pick up slightly from there with a 2.6 per cent increase in 2019.

– CREA: Home sales forecast for 2018 cut (5.3% drop) due to the impact of tighter mortgage regulations taking effect in the new year. Expects national sales activity for 2017 to decline by 4% to 513,900, average price to rise 4.2% to $510,400. There was a rise of 3.9% in nationwide home sales in November compared to the previous month. Led by a 17% jump for sales on the Greater Toronto Area which accounted for more than two thirds of the national gain.

– Royal LePage is forecasting an average price of $901,392 for Toronto detached homes by the end of 2018, an increase of 6.8%.

 
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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