Housing costs, and Canada’s unique way of capturing them in inflation, suggest price gains may slow rapidly in coming months. Read on.
That means Canadian inflation measures are influenced by both the rise in mortgage costs as the Bank of Canada aggressively raises rates and by the resulting slowdown in theWhile inflation was still 6.3 per cent in December, price pressures in Canada are expected to lose momentum thanks to base effects and continued cooling in the Canadian real estate market, which features shorter-duration mortgages than the U.S. and a higher share of variable-rate home loans.
Those differences are one reason economists say the Bank of Canada — which said it intends to pause its tightening campaign — won’t have to raise borrowing costs as high as the U.S. Federal Reserve. “One way Canada actually stands out from a lot of other countries is that when the Bank of Canada raises interest rates, there’s a temporary boost to inflation because of this mortgage interest rate effect,” Stephen Brown, an economist at Capital Economics, said by phone.The U.S. calculates housing inflation using owners’ equivalent rent, or the price a property owner would have to pay to rent to live there.
Shelter has been a major driver of Canadian inflation in recent months, and was up seven per cent in December. The mortgage interest and rent sub-indexes saw year-over-year jumps of 18 per cent and 5.8 per cent, respectively. But with rates now on hold, Brown expects mortgage interest costs to peak before dropping sharply in the second half of this year. Other inflation inputs, such as commissions on home sales, are already easing.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Canada's rapidly cooling housing market is helping to slow inflationHousing costs, and Canada’s unique way of capturing them in inflation, suggest price gains may slow rapidly in coming months. Read on.
Read more »
Canada's rapidly cooling housing market is helping to slow inflationHousing costs, and Canada’s unique way of capturing them in inflation, suggest price gains may slow rapidly in coming months. Read on.
Read more »
Predictions for the housing market, lower internet costs and stable stocks: Must-read business and investing storiesPlus, the real savings when you own an electric vehicle
Read more »
Comment: Let's get on with creating more affordable housingIt’s time we should expect to start seeing dramatic changes in the way that municipalities plan and approve housing.
Read more »
Ontario Greenbelt 'is our jurisdiction,' Ford says after federal environment minister suggests intervening in housing planThe plan \u0027flies in the face of everything we’re trying to do in terms of being better prepared for the impacts of climate change,\u0027 Steven Guilbeault said
Read more »
As Fredericton creates more housing than ever, affordability is a challenge - New Brunswick | Globalnews.caThe City of Fredericton says development in the city has surpassed $270 million this year, but affordable housing remains a challenge.
Read more »