August 2022 Mortgage & Market Report

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Each Executive Summary Report is for a specific TRREB zone combination and includes a map of the included zones and a 4 page summary for each property type (detached, semi-detached, townhomes, condos)
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The Information / statistics you can find in each Executive Summary Report include:

• Data comparing the – 1, 3, 5 and 10 year sales averages.

• Stats categories – Sales, New Listings, Active Listings, Average Price, Months of Inventory (MOI), Sales to New Listing Ratio (SNLR)

Timely Topics

Is Today the Right Time to Buy?

Given the rapid rise in interest rates, and accompanying decline in home prices over the past number of months, we wanted to try and quantify the net impact to potential buyers.  We analyzed the GTA Real Estate Market in February as compared to August and prepared the below document showing our findings.

We hope it helps give some perspective on the current market conditions given how much change there has been over the past number of months. It’s a very visual tool for your clients who may be on the fence about buying now.

Click the image below to download the document.

Bank of Canada Increases…Again – What Does This Mean for You?

On September 7th, the Bank of Canada increased its overnight rate by 0.75% (75 bp) to 3.25%.  This increase was in line with most economists expectations, and builds on the 1.00% (100 bp) rate hike from July.  Lenders increased their Prime Lending Rates accordingly which moved from 4.70% to 5.45% (TD Mortgage Prime moves from 4.85% to 5.60%).

Our team prepared the below info bulletin that discusses why the Bank of Canada increased, what’s next, and how this increase impacts current mortgage holders and those looking to get in the market.

Click the image below to download the document.

First-Time Home Buyer Incentive Program – Toronto Edition!

Did you know that Toronto has a special version of the First Time Home Buyer Incentive (FTHBI) Program?  While the rest of Canada is capped at purchases around $500,000, the Toronto program allows for purchases of between $720,000 to $790,000 depending on the size of the borrower’s down payment.

We’ve added a Toronto version of our FTHBI guide below which provides full details of the program, along with a financial model to help quantify the costs/benefits of the program.

To summarize what the program is in two sentences:  If you’ve saved at least 5% for a down payment, and qualify for the program, the government will give you an additional 5% or 10% lump sum payment that is interest free for as long as you own your home (or 25years whichever is earlier).  Once you sell your home, you must pay back the 5% or 10% which will be calculated based on your sale price (or market valuation if 25 years).  The upside & downside risk is now also capped given a recent change to the program in June. 

Click the image below to download the document.

Mortgage Rates and Trends!

Outline Financial Rate Grid – September 20, 2022

Variable Rate forecast – as variable rates are linked to a lenders’/banks’ prime lending rate, any interest rate movement by the Bank of Canada (BofC) typically results in an immediate change to variable rates. As widely expected, on September 7th the Bank of Canada increased its overnight rate by 0.75%. They will meet meet 2 more times this year:

Jan 26, 2022 (no increase)
Mar 2, 2022 (actual: +025% increase)
Apr 13, 2022 (actual: +0.50% increase)
Jun 1, 2022 (actual: +0.50% increase)
Jul 13, 2022 (actual: +0.50% increase)
Sep 7, 2022 (actual: +0.75% increase)
Oct 26, 2022 (anticipated: +0.25% or 0.50% increase)
Dec 7, 2022 (anticipated: +0.00% or 0.25% increase)

As of the time of writing this article, the Big 6 Banks are generally forecasting the Bank of Canada to increase an additional 0.25% to 0.75% during 2022, but then remain relatively flat during 2023 (with the possibility of a decrease in late 2023 or early 2024). For reference, the current Bank of Canada overnight rate is 3.25% with lenders’/banks’ prime lending rate at 5.45%. We will continue to monitor these forecasts and update the information when applicable.

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Fixed Rate Forecast – 5-year fixed rates typically follow the Government of Canada 5-year Bond Yields which is the market’s view/prediction of where interest rates will be in the future.

5-year bond yields increased steadily from the start of 2022 moving from the 1.5% range in January to a peak of 3.5% in mid-June with 5-year fixed rates increasing accordingly. Yields have retreated somewhat since then and have ranged between the 2.6% and 3.3% mark during July, August, and the start of September. Current yields are at the high end of this range and all eyes will be on the Bank of Canada as they digest upcoming GDP, inflation, employment, and other economic data.

For a customized analysis of which rate or product option might be right for you or your clients, please contact a member of the Outline Team as we are always on standby to help.

Market Report Downloads

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