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Email this8:16 am
October 29, 2017
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1.4%
I’m thinking an interest rate hold on March 6 as that inflation rate is low.
2:39 pm
October 29, 2017
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CPI increased from 133.4 to 133.6 and inflation slowed from 2.0% to 1.4%
3:33 pm
February 20, 2018
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Inflation rate is bogus people spending much of their income on rents now. The building industry is pulling a lever of government.
3:49 pm
October 29, 2017
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It’s true, rent is a very small component of CPI. So if a boat load of people are spending significantly more of their income on rent, then perhaps rent weighting should be seriously increased.
3:54 pm
October 29, 2017
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Rent is 6.2%
4:36 pm
October 21, 2013
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Vatox said
It’s true, rent is a very small component of CPI. So if a boat load of people are spending significantly more of their income on rent, then perhaps rent weighting should be seriously increased.
Is there any mechanism for regular review of allocations within the model? I would be surprised if there were.
Generally, I think it is not in the interests of governments to make such adjustments. They would then have to make increases in social benefits, GIS, etc which reflected reality.
5:19 pm
October 29, 2017
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This has a short explanation of “pure cost”
5:34 pm
December 17, 2016
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Bank of Canada's Preferred Measures of Core Inflation General Information Document
5:41 pm
October 29, 2017
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Looks like CPI Component share weightings are updated every two years. I think 2017 was the most recent update so perhaps next year may show a higher rent weighting.
6:04 pm
April 6, 2013
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It doesn't matter if many people spend lots on rent. Many people also spend zero on rent because they own and don't rent their housing.
Rent is really for determining shelter cost. Rent's 6.2% part of the CPI basket is part of the 26.8% shelter cost part of the CPI basket.
According to An Analysis of the 2017 Consumer Price Index Basket Update, Based on 2015 Expenditures, the basket weights are updated every two years based on the numbers from Statistics Canada’s Survey of Household Spending.
6:08 pm
February 20, 2018
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6.2 what a joke.
Rent makes up third to half of many peoples income after tax with other expenses they're left with little it is a crisis caused by the corrupt lobbying building industry and everyone knows it, gov both lib n con and bank of canada started with mr bubbles mark carney. the solution higher interest rates and for the government to start building compete with the commoditized private sector builders. For far too long they have been directing policy in Ontario funding whoever left and right to disrupt. The building industry has shown they have failed in profitable affordable housing.
6:19 pm
October 29, 2017
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Hotmony, how are higher interest rates going to lower rents?
6:24 pm
April 6, 2013
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As well, not everyone rents in Toronto and Vancouver.
As a whole, only about 9 million of Canada's 35 million lives in those two expensive areas.
7:25 pm
October 29, 2017
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Toronto may have an 11% increase in rents. Unfortunately federal benefits follow Canada CPI and not individual cities or provinces. Our cost of living increases are averaged over everywhere.
https://globalnews.ca/news/4814651/monthly-rents-canada-report/
7:55 pm
October 29, 2017
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10:07 pm
October 29, 2017
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This adds some insight..
https://globalnews.ca/news/3478535/why-is-canadas-inflation-rate-so-low-when-life-is-so-expensive/
4:36 am
February 20, 2018
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also bogus price index could keep a lid on other things like public sector wages
higher interest rates will shake out speculators and foreign investors
if shelter costs aren't affordable then we will have social instability including property rights limitations
8:24 am
October 29, 2017
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Higher interest rates will increase rental demand as would be house buyers drop out of home ownership plans and current owners, living on the edge, may be forced out and into renting, also increasing demand. If demand increases the rental price goes up.
Speculators are only a concern if the home is unoccupied. If the speculator rents out the home it actually increases supply and lowers rental prices as the speculator needs to keep the price competitive. If anything, I would expect higher interest rates would increase rental costs as landlords try to offset increased mortgage and maintenance costs, especially for a variable rate mortgage.
In BC we have a new speculator tax and every homeowner must submit a form to prove occupancy. You fill a separate form for every home you own or are listed as a co-owner.
EDIT: I filled mine out online a few weeks ago. Fast and simple.
1:18 pm
February 20, 2018
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Many speculator properties sit empty.
So if a home was like in buffalo or Detroit 10-20k it’s not affordable for renters extreme example but u understand. Higher rates will reduce values helping renters to spend same on mortgage as rent. Higher rates leading to higher rents is an industry bs excuse.
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