{"id":413092,"date":"2020-12-16T10:12:18","date_gmt":"2020-12-16T15:12:18","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/?p=413092"},"modified":"2020-12-16T10:12:18","modified_gmt":"2020-12-16T15:12:18","slug":"home-prices-rent-drive-inflation-in-november","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/home-prices-rent-drive-inflation-in-november\/","title":{"rendered":"Home prices, rent drive inflation in November"},"content":{"rendered":"<p>The country’s annual inflation rate rose to 1% in November, driven by a rise in prices for homes, rent and goods around the house.<\/p>\n<p>Statistics Canada said Wednesday the increase compared with a year-over-year increase of 0.7% in October and 0.5% in September.<\/p>\n<p>Economists had expected a year-over-year increase for November of 0.8%, according to financial data firm Refinitiv.<\/p>\n<p>Shelter prices rose 1.9%, contributing the most to the overall increase. Rent prices rose 1.5% in November compared to one year earlier, an increase from the 1% recorded in October.<\/p>\n<p>Prices for furniture were up 2.8%, and appliances by 2.9%, remaining above pre-pandemic levels.<\/p>\n<p>Statistics Canada said the focus on spending around houses is likely due to the pandemic itself: physical distancing rules and workers asked to stay home “may have prompted increased spending on big-ticket items.”<\/p>\n<p>Also driving the increase is a collision of pent-up demand, a glut of savings, historically low interest rates and homebuyers interested in more single-family homes than condominiums.<\/p>\n<p>Throw into the mix higher building material costs and low inventories, and Statistics Canada said there is a perfect mixture for rising prices for new housing.<\/p>\n<p>Mortgage rates have been driven down by the Bank of Canada’s key policy rate \u2014 currently at 0.25% \u2014 which is as low as the central bank says it can go.<\/p>\n<p>The Bank of Canada has said the rate will stay there until inflation is back at 2%, which the central bank said last week it doesn’t expect to happen until some time in 2023.<\/p>\n<p>“I have no doubt that that is a factor supporting the housing market,” Bank of Canada governor Tiff Macklem said Tuesday when asked by a reporter about the housing market.<\/p>\n<p>“Frankly, that’s part of the way monetary policy works. That’s part of the way it puts stimulus in the system by encouraging spending particularly on things that are often bought with credit.”<\/p>\n<p>In November, the average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was about 1.7%.<\/p>\n<p>Gasoline prices in November fell 11.9% year over year as the pandemic continued to weigh on demand.<\/p>\n<p>Statistics Canada says the consumer price index excluding gasoline in November was up 1.3% compared with a year ago.<\/p>\n<p>Rising gasoline prices expected next year will likely push headline inflation above the central bank’s 2% target next year, but the overshoot could be temporary, says CIBC senior economist Royce Mendes.<\/p>\n<p>He wrote in a note that the Bank of Canada will likely look through it and leave the policy rate on hold until slack in the economy is absorbed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The month’s increase in prices beat expectations<\/p>\n","protected":false},"author":145539,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2313,2312],"tags":[2426],"yst_prominent_words":[10193,25493,19071,17561,17013,13147,13145,13137,11848,11801,11433,10304,2116,9196,6848,6834,6461,6351,2177,2171],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/413092"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/145539"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=413092"}],"version-history":[{"count":1,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/413092\/revisions"}],"predecessor-version":[{"id":413093,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/413092\/revisions\/413093"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=413092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=413092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=413092"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=413092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}