May 19th, 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:
– Scotiabank chief economist: Reports of Canadian housing market’s death have been greatly “exaggerated”. Market is experiencing “Covid-related pause” rather than prolonged downturn. National housing prices will decline 4% by year-end relative to 2019, then rise 11% by end of 2021.
– Conference Board of Canada report: Toronto’s GDP is expected to fall by 3% this year, which includes a 1.0% contraction in this year’s first quarter and a 6% drop in the second. However, Toronto’s economy is poised to rebound next year with GDP growth of 6.2%.
– Zoocasa: In Toronto, as a whole, the median price for a condo dropped by $65,000 from February to April. Condo apartment sales dropped 64% since February, with just 482 transactions taking place across the city in April compared to 1,335 in February.
– Finder.com Survey: An incredible 81% of the country’s Gen Zers (Age 18-24) think they’ll purchase a home in next 20 years. 10% already own their own home, while 35% believe they’ll purchase a home within next five years. 1/10 Canadians think they will be “forever renters”.
– Department of Finance Canada based on data provided by the Canadian Bankers Association: As of April 29, more than 720,000 people have applied for deferrals or skip-a-payment relief. And over 417,000 approvals or request to defer credit card minimum payments have been processed.
– Canada lost 2 million jobs in April as result of pandemic-related shutdowns, biggest decline on record. Adds to 1 million decline in March. Jobless rate jumped to 13%. Economists were anticipating loss of 4 million jobs last month, with unemployment rate rising to 18%.
Stay tuned for the next update!
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