September 29th, 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:
– A very strong majority of Ontarians think housing is an important (60%) or somewhat important (32%) contributor to the provincial economy recovery from COVID-19, according to research conducted by Nanos Research for OREA.
– CMHC’s Housing Market Assessment report says there was some evidence of overvaluation in Canada’s housing market this spring amid COVID-19 pandemic. Was a “moderate degree of vulnerability” in housing market as of the end of June, the same grade the market received in February.
– In its Canadian National Rent Report, PadMapper realized that In Toronto, one and two-bedroom median rents are down 10% and 12%, to $2,070 and $2,630 respectively, from a year ago. From the month before, they slipped 1.4% and 0.8%.
– Lower interest rates have become a motivating factor for young Canadians to get into housing market, according to a report by Scotiabank. Despite the global pandemic, nearly one-in-five (18%) Canadians between the ages of 18-34 said their plans to buy a home have been accelerated.
– Urbanation says strong demand factors of (pre-pandemic) job growth, immigration, and high homeownership prices combined with lagging rental construction activity will create a shortage of 200,000 units in Ontario’s rental market over the next ten years.
– MNP Consumer Debt Index: Proportion of Canadians who can cover living expenses for next year without taking on more debt has gone up to 61%. 43% say that their current debt loads are better than pre-pandemic levels, while 27% say their debt situation is better compared to 2019.
Stay tuned for the next update!
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