Increased Rent Prices Boost August Housing Costs in Canada

Find out how increased rent prices have contributed to higher housing costs in Canada during August. Learn more about the impact of rising expenses on homeownership and the rental market.

Elevated rent prices have significantly contributed to the higher housing costs experienced in August, according to Statistics Canada. The rising expenses associated with homeownership have forced more individuals to turn to the rental market. Recent data from the agency reveals that inflation for the month of August elevated to four percent, primarily driven by increased gas prices. Moreover, shelter prices experienced a six percent year-over-year climb, while the rent index saw a growth of 6.5 percent for the same month. Statistics Canada suggests that the difficulty in obtaining homeownership due to higher interest rates has led to a surge in rental demand and subsequently driven up the prices for rental properties. Rent prices increased in eight provinces, notably led by Nova Scotia with a considerable rise of 9.5 percent, closely followed by Newfoundland and Labrador at 8.4 percent. The mortgage interest cost index also saw a modest increase from 30.6 percent in July to 30.9 percent in August.

The issue of housing prices has been a prominent concern in Ottawa, as the government seeks to address the widespread housing shortage across the nation. In response, the federal Liberal government recently announced the complete elimination of the Goods and Services Tax (GST) on new rental builds. This proactive move has received praise from several property developers who believe it will have a positive impact on the market.

In conclusion, the rising rent prices, driven by increased homeownership obstacles due to higher interest rates, have propelled more individuals into the rental market. Consequently, this surge in demand has led to a significant spike in rental property costs. Efforts to address the housing shortage have seen the federal government remove all GST on new rental builds, a decision that has garnered appreciation from various developers.