Canadian households are seeing mounting mortgage costs, property taxes, and other housing charges
Last month, Canadian mortgage costs saw their largest gains in over three decades, according to the national statistics agency.
Mortgage interest costs posted a significant 11.4% annual increase in October, the largest proportional upswing since February 1991 (11.7%), Statistics Canada reported.
Compounding the pain of Canadian homeowners was the 3.6% annual increase in property taxes and other housing charges. The overall consumer price index surged by 6.9% year over year in October, while core inflation grew by 5.3% during the same period.
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“More indebted Canadian households are particularly sensitive to rising credit costs, while most US homeowners have 30-year fixed-rate mortgages that shield them from tighter monetary policy,” said Sal Guatieri, senior economist and director at BMO Capital Markets.
“Policy rates are moving deeper into restrictive territory, putting the economy on course for at least a moderate downturn.”
Avery Shenfeld, chief economist at CIBC Capital Markets, warned that housing-related inflation appears to be “quite sticky” at this point.
“Housing cost measures tied to mortgage interest payments are escalating at a more than 11% pace as borrowers renew their obligations at higher rates,” Shenfeld said.
