What’s Up Wednesday

Short and concise info on the last week.

Housing and Real Estate
In the latest housing numbers released by the Canadian Real Estate Association (CREA), year-over-year home sale prices up by 31.6%, overall sales March – March up 76.2%. Annually, land transfer numbers in Toronto are up by 11.2% from last year, and Hamilton leads with a rise of 20.9% on the year. Overall numbers indicated that sales were up 25.4% higher than previously projected rates for the month of March. Survey’s showing that average buyers are favouring housing outside of large city centres.

Canadian Consumer Survey from Q1 showing expectations of the average consumer is wavering but generally returning to pre-pandemic levels of uncertainty in numerous areas. Inflation expectations above average, but lower than this Q1 2020, while remaining within the BOC models of 1-3%/ year. Consumer expectation on spending growth is returning, though there is flat income growth to support. Large scale, pandemic has not changed average consumer’s ability to support their debt payments.

Government and The Bank of Canada
Chrystia Freeland, the Minister of Finance has proposed a 1% foreign buyers tax on all unused properties starting on January 1st, 2022. Properties considered to be “non-resident, non-Canadian owned residential real estate” would fall under this category. This is in part the federal governments efforts to cool the hot housing market, and that “…homes are for Canadians to live in, not assets for parking offshore money.”.

Bank of Canada announced this morning the overnight rate will remain the same at 2.45% currently. Projections on the change has been moved from 2023 to Q3 or Q4 2022. No change in the proposal from the BOC to raise the stress test for uninsured (20% equity or downpayment or higher) mortgages. Proposal is to raise the stress test by 46 basis points from 4.79% to 5.25 (or 2 percentage points, whichever is higher). Still no information on the affect for High Ratio Mortgage (less than 20% downpayment or equity) holders and buyers.

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