March 2nd, 2021 Mortgage Industry Update
The Bank of Canada announced on January 20th 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:
– In its analysis of figures from Statistics Canada, CIBC said that job losses spurred by the COVID-19 recession mainly occurred in the segment making $27.81 an hour or less. Positions earning $13.91 per hour saw the largest decline over the past year.
– Hong Kong remained world’s least affordable housing market for 11th year. Topped Vancouver, Sydney and Auckland as most unaffordable residential market in the world last year, according to report published by think tanks Urban Reform Institute + Frontier Centre for Public Policy.
– BMO Capital Markets: Using data from the Canadian Real Estate Association; benchmark home price in the Greater Toronto Area went up by $98,900 annually in January. This was far above the region’s most recently calculated median income of $86,670.
– Zolo Survey: Top 5 features home-buyers would seek in a home; main floor bathroom, 71% indicating they would either like to have or must-have. Second was garage at 69%, third master bedroom with en suite bathroom and private outdoor space tied at 68%. Updated kitchen was 66%.
– Statistics Canada: Residential mortgage credit up 7.7% in 2020 to $1.7T representing annual increase of $118B. Fastest yearly growth since 2010, far above 5.4% yearly growth avg over past decade. First time ever outstanding mortgage debt increased by more than $100B in one year.
– Statistics Canada: Inflation rose 1% in January compared with the same month last year, accelerating from the end of 2020 and poised to go higher in the coming months. It just narrowly outpaced expectations from economists who on average expected a 0.9% increase.
– Statistics Canada: Mortgage borrowing hit record high in 2020; added almost $108B in mortgage debt. That compares with less than two-thirds that amount in 2019 and just under $46B in 2018. Surge powered by combination of historically low borrowing costs and resilient demand.
– CREA: January sales up 35.2% compared to 2020, and up 2% monthly. National average price of a home sold also soared to a record $621,525 in January, up 22.8% annually. Single family home prices rose 2.6% monthly and 17.4% annually. Condos up 0.2% monthly, and down 3.3% annually.
Stay tuned for the next update!