June 16th, 2020 Mortgage Industry Update

The Bank of Canada announced on June 3rd that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The possibility of further rate reductions remains unclear at this time as the economy deals with the COVID-19 pandemic.

Additionally this week:
– Rentals.ca: Average rent for apartments and condo units in March, April and May has decreased. In May, average rent in Toronto declined by 0.5% to $2,290 per month, which followed a decline of 5.9% in April. Match overall decline of rents in Canada; 1.4% decline in May.

– Following the announcement of CMHC’s new mortgage rules last week, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, confirmed Monday they will not be following CMHC’s lead.

– CMHC changes rules for obtaining mortgage insurance, effective July 1. Includes limiting debt ratios for borrowers, increasing credit score requirements, limiting borrowing funds for minimal down payment purchases, changed rules for commercial multi-family property refinancing.

– Statistics Canada: Labour market unexpectedly strengthened after two-straight months of record losses as the country gradually reopens from COVID-19 related restrictions. Employment rose by 289,600 in May, surprising economists who had been anticipating a 500,000 loss last month.

– A Bloomberg News poll taken at the end of May found that 30 per cent of respondents who had lost their job or seen hours decline because of the coronavirus pandemic said they were re-employed or working more now.

– TRREB: There were 4,606 property sales across the GTA in May; a 53.2% rebound from April. The average selling price for all homes sold was $863,599, up 3% from 2019. Active listings sank 42.8% from 2019. New listings surged almost 48%.

 
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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