May 26th, 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:
– Statistics Canada: Inflation went negative for the first time since the 2009 recession after the coronavirus lockdown put the brakes on the world economy. Consumer prices dropped 0.2% in April from a year earlier. Also down from a 0.9% annual rate in March and 2.2% in February.

– A recent Ipsos poll conducted on behalf of the Toronto Regional Real Estate Board (TRREB) has found that 3 in 10 (27%) GTA residents are likely (9% very/19% somewhat) to purchase a home sometime in the next 12 months.

– Colliers Canada: Pandemic has hit the commercial sector especially hard, with around 21% of Canadian commercial tenants requesting rent relief in April. Small business tenants were 2.7 times more likely to request rent relief than regional, national, or international tenants.

– CREA: Home sales across Canada down 57% from 2019 in April to their lowest level since 1984. Also down 56.8% from March. New listings fell 55.7% from March. Average house price fell to $488,000; 1.3% decline from 2019, but a significant 10% contraction compared to March 2020.

– Zolo Survey: Roughly 60% of buyers still consider 2020 a good year to purchase a home or over the next five years. 16% planning to buy this year and another 47% planning to buy within two to five years.

– Rentals.ca report: 1 bedroom apartments saw month-over-month rent declines of 4% and year-over-year of 5.8% to $2,125. 2 bedrooms also saw month-over-month declines of 7.7% and year-over-year of 3.3% to $2,669 last month. Still the most expensive place to rent in the country.

 
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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