October 13th, 2020 Mortgage Industry Update

The Bank of Canada announced on September 9th that its overnight lending rate will remain at 0.25%. The prime rate remains 2.45%. The Bank of Canada has openly stated that it will more than likely keep rates at this “effective lower bound” for the immediate future until the effects of the pandemic are more clear.

Additionally this week:
– TRREB: September 2020 GTA sales were up 42.3% from 2019 to 11,083 (set a new record for home sales volume for the month of September). The average price of all homes was $960,772, up 14% from the same time last year.

– Attesting to the market’s status as one of Canada’s hottest housing destinations, Toronto apartment prices have grown by 78% over last five years alone (up to $592,900 in 2020), while single-family prices went up by 51% during same time frame (reaching an average of $999,200).

– MoveSnap poll: 10% of Canadian urbanites plan to move out to the suburbs. It also found that while 25% of respondents said they considered a move during the pandemic — whether it be in the city or outside of an urban area — only 19% have actually packed up and made the switch.

– Office of the Superintendent of Bankruptcy Canada: Insolvency (bankruptcy) incidences fell to the lowest level since 1997. In August, reading fell by 2.4% monthly and 42% annually to end up at 6,464 filings. Average filings were at 6,442 per month from April to August.

– Statistics Canada: In August 2020, applications to build a total of $2.5 billion worth of detached houses across the country got the green signal. This represents a 9.9% increase over July. In July 2020, the value totalled $2.3 billion, rising from $2.2 billion in June.

– Statistics Canada says real GDP grew by 3% in July, matching the agency’s preliminary estimate and economists’ expectations, but below the 6.5% recorded in June, and May’s 4.8% bump. Overall economy in July was about 6% below its pre-pandemic level in February.

 
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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