Rising Canadian Shelter Costs:

Rising housing costs have played a large role in boosting Canadian in­flation in recent years, with overall shelter costs up a hefty 2.6% year over year. Until recently, it’s mostly been a story about fast-rising home prices, home insurance, and mortgage payments—i.e., all the costs asso­ciated with owning a home. And, those so-called owned accommodation costs are still up a robust 2.5% year over year, even with the modera­tion in interest rates and mild home price increases this year. Howev­er, a new source of shelter inflation has burst onto the scene in 2019. Rent costs have jumped this year and are now up 3.7% year over year, the fastest pace since 1991. StatsCan started using a new methodology at the start of the year for rent costs. The result is clear.  After 25 years of reportedly averaging just 1.3% annualized growth, rents have broken higher out of a mild range. This factor alone has added 2 ticks to overall Canadian inflation in the past year.
Source: Bloomberg, FactSet, the Globe and Mail, Street Account, BMO Capital Markets
Source: BMO Economics