Rent, mortgage interest helped drive inflation higher in April: Statistics Canada

OTTAWA –

The first improve in annual inflation since its June 2022 peak was pushed partially by increased mortgage curiosity prices and better lease costs, Statistics Canada mentioned Tuesday.

Mortgage curiosity prices have been up 28.5 per cent in April in contrast with a 12 months in the past on account of the Bank of Canada elevating rates of interest at a breakneck tempo over the previous 12 months. That’s up from 26.4 per cent in March and 23.9 per cent in February.

Meanwhile, inflation for lease was 6.1 per cent 12 months over 12 months, up from 5.3 per cent in April.

That’s regardless of general shelter prices rising at a slower tempo in April, at 4.9 per cent.

The year-over-year improve within the owners’ alternative price index additionally slowed for the twelfth consecutive month, which Statistics Canada says displays a basic cooling of the housing market.

A report by RBC Economics says shelter was the biggest contributor to headline inflation in April, accounting for a 3rd of the expansion.

The central financial institution’s interest-rate hikes have come full circle, feeding again into inflation although different key drivers like commodities have been coming again down, mentioned Colin Cieszynski, chief market strategist at SIA Wealth Management, in a be aware.

However, RBC mentioned year-over-year mortgage curiosity prices are anticipated to begin slowing due to the central financial institution’s pause on rate of interest hikes.

But as for lease, excessive demand for rental housing may hold costs up. A March report by RBC mentioned Canada’s scarcity of rental housing may quadruple by 2026, and the fierce demand for rental items has been driving file lease will increase.

This report by The Canadian Press was first printed May 16, 2023