November 13th, 2018 Mortgage Industry Update

The Bank of Canada announced on October 24th that it’s overnight lending rate will increase to 1.75% from 1.50%. The prime rate increases from 3.70% to 3.95%. The common prediction currently stands at the Bank of Canada continuing to increase rates in the near future as the word “gradual” was omitted from their recent release.

Additionally this week:
– The price per square foot (PPSF) of a downtown Toronto condo increased more than 10% in the last year according to a new survey from CENTURY 21 Canada. It found that the PPSF of a downtown Toronto condo rose to $903 from $819 in 2017.

– City of Vancouver says it has collected $18M from the first year of its empty homes tax and another $12M could still flow into its coffers. Expects to generate a total of $30M from the first year of the tax which is applied to vacant residential properties.

– CMHC forecasts balanced market in GTA through 2020, with fewer sales expected because of rising interest rates. “As much as sales are going to come down slightly, we’ll see house price growth be more or less in line with inflation, not the double-digit kind we were accustomed to”.

– 43 percent of families surveyed in a recent report from Sotheby’s International Realty Canada said that high detached home prices meant they had to settle for higher density housing (condos, town houses, etc). Data comes from a poll of 1,743 families across Canada.

– Knight Frank’s Prime Global Cities Index: Toronto comes out at 7th as one of the strongest markets in the world for luxury real estate growth, 2nd in North America. Posted 8.5% year-over-year increase in prime real estate prices (top 5% most expensive) in Q3 2018.

– TREB: Average sale price was $807,340 in October, up 3.5% from $780,400 in 2017. Up 1% from September. 7,492 sales in October, up 6% from 2017, down 1% compared to September. 14,431 new listings, down 2.7% compared with 2017. Gains mainly from condos and semi detached homes.

 
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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