Real Estate in Canada in September 2022 was an eventful month. Today we bring your attention to the top 3 news that happened last month:
1) The Prime Rate is now set at 5.45%.
Just 6 months ago, the Prime Rate was only 2.45% and is now 300 bps higher. This is the fastest rise in interest rates ever, and as of early October, another increase is expected on October 26th.
The last time the Prime Rate was above 5% was early in 2008. Since December of 2008 and up until July 2022, the Prime Rate has remained below the 4% mark.
We certainly look forward to seeing the Prime Rate coming down eventually.
2) With the Prime Rate going up this quickly and by this much, some lenders are bringing back the 40-year mortgages to help buyers with income qualification. As is often the case, the industry does what the industry does – it adapts to the market by bringing new products in.
Let’s see if the Gov of Canada will bring back 30 and perhaps 35-year mortgages for the insured market.
3) Greater Vancouver, Fraser Valley, and Metro Vancouver Markets saw a decline of almost 50% in the number of Sales for September Year over Year.
The number is consistent among the three markets and perfectly represents the impact of the high-interest rate environment.
Many buyers are failing to qualify for higher mortgage amounts due to the “stress test” being in place for all mortgages since 2018. Buyers these days must prove that they can manage mortgage payments at historically high rates of 7%-7.25%, despite the actual contract rates being just above 5%.
Do you have any questions?
Reach out to our team of experienced professionals at Access My Home Equity today for a free consultation:
Email: info@accessmyhomeequity.ca
Phone: 604-362-4467
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