June 2nd, 2020 Mortgage Industry Update

The Bank of Canada announced on April 15th 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:
– Ipsos survey: 27% of respondents are likely to buy a house in the GTA within the next 12 months. The most likely to purchase in the near future are young professionals aged 18 to 34 (45%) and child-rearing households (37%).

– TorontoRentals.ca May rent report: The average monthly rental rate for all property types in the GTA declined by 2.7% to $2,180 per month. The average monthly asking rent in the area peaked at $2,328 in August of 2019, but was still up 1.3% annually in April of this year.

– Global News: In the 416, condo prices were up 1.8% in the first two weeks of May compared to 2019, detached houses were up 2.6%. In 905 communities condo prices were up 3.4%, detached houses were up 0.9%. GTA had only 2,005 residential properties sold in first two weeks of May.

– Despite multiple headwinds and the continuous ravages of COVID-19, Canadian market activity and purchasing power will be able to recover quickly after the outbreak eases, according to outgoing Bank of Canada Governor Stephen Poloz.

– CMHC said that deferrals comprised around 12% of Canadian mortgage holders. As of mid-May, 27% of all deferrals came from Quebec, and 26% were from Alberta. Ontario represented 21% of those who put off their mortgage payments, while British Columbia accounted for just 7%.

– The Bank of Canada reduces its qualifying rate ten basis points, from 5.04% to 4.94%. After the decrease, the five-year fixed mortgage rate will have inched another step closer to a level not seen since 2016, when it was reduced to 4.64%.

 
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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