May 12th, 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:
– Zoocasa: There were 520 home sales across the Peel Region in April, a 73% decline from 2019. Halton Region sales totalled 338, which was a 65% annual decline. However average home prices rose 7% to $802,155 in Peel and 2% to $870,966 in Halton.

– Altus Group chief economist Peter Norman: Canada’s home prices are still likely to see a 5%-10% annual gain by year-end. Despite COVID-19 travel restrictions that have ground the entry of wealthy foreign homebuyers to a halt, housing will return to upward trajectory in late 2020.

– Point2 Homes: 86% of realtors say they have noticed a significant drop in homebuyers’ interest since the onset of the Pandemic. Of these respondents, 41% said that most of their clients stopped searching for a home, so they were forced to put everything on hold.

– TRREB: GTA sales fell 66% to 2,347 in April from 2019. Average price down 12% to $789,274 from March, still up 10% from 2019. New listings fell to 6,174 from 17,212 in April 2019, a decline of 64%. In City of Toronto sales down 68%, average price down 2.5% to $881,424 from 2019.

– Realosophy: 25% increase in rental condo listings. Former Airbnb hosts likely scrambling to lease out units. Condo rental inventory from 1.5 months of inventory (MOI) at the end of March to nearly 4 MOI at the end of April. 3.5% drop in average rents for the month of April.

– Finance Minister Bill Morneau is naming Tiff Macklem, the current dean of UofT’s Rotman School of Management, as the new governor of the Bank of Canada. Current governor Stephen Poloz’s seven-year term is expiring in June.

 
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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