November 20th, 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:
– Bank of Canada analysis: Mortgage stress tests introduced 2 years ago have reduced the share of new high-leverage, insured loans — those of more than 4.5 times a borrower’s annual income — to 6% in Q2 2018 from 20% in late 2016.
– Altus Group: GTA new townhouse units sold has steadily declined over the past 2 years, from 5,329 in the first half of 2016 to just 885 during 2018. Proportion of newly sold homes that townhouses represented has also experienced a downward slope, declining to just 7% in 2018.
– New polling data from Nanos Research shows 44.2% of respondents now expect the value of real estate in their neighbourhoods to increase over the 6 months. Highest proportion since May 2017 and the level has rapidly risen from a recent low of 36.1% over the last two months.
– Commercial network members of TREB reported 2,331,390 square feet of total leased space for combined industrial, commercial/retail, and office segments – up 29.2% from October 2017. The industrial sector accounted for almost 73% of the total square feet leased.
– BC tackling tax evasion in condominium sales by setting up a registry that tracks a project’s pre-sales transactions and ownership history. Information collected will be shared with CRA so that they can be matched with income tax returns. Starts January 1.
– CMHC: Increase in multi-unit projects such as condos, apartments, townhouses helped push the annual pace of housing starts in October higher. Seasonally adjusted annual rate of housing starts came in at 205,925 units, up from 189,730 in September. Expected an annual rate of 200k.
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.Share this post on: Connect with us on: