Inflation Hits Real Estate: Homeowners and Tenants Face Rising Housing Costs

Bad news for homeowners: inflation is hitting the real estate sector hard. The cost of mortgage interest has exploded, with a rise of 28.5% in the country in one year. Moreover, housing costs for owners, but also for tenants, have risen sharply in the past year.

This exponential increase in interest on a mortgage is explained by the rise in the number of mortgage loans obtained or renewed at higher interest rates, advances Statistics Canada. This explosion in the cost of mortgage interest is pushing up the average housing costs of Canadians, whether they own or rent. Canadians pay 4.9% more for housing in April 2022 compared to April 2023.

The inflation of housing costs is actually more reflected in Montreal than elsewhere in Canada. Housing costs paid by Montrealers increased by an average of 6.7% between April 2022 and April 2023. The largest increase is for owners for whom these costs increased by 8.6%. For Montreal tenants, housing costs increased by 5.1%.

Tenants can therefore hardly rejoice. Quebec rents increased by 4.1% on average, less rapidly than the rise in rents in the rest of the country, which stands at 6.1%. The detail of the increase in rents for Montreal is not available data. The sharp rise in mortgage interest would not be for nothing in this inflation of rents, analyzes Statistics Canada, which believes that this stimulates the rental market and therefore increases rents.

In the field of energy, Quebecers heating with fuel oil and natural gas have the right to respite. In fact, the price of natural gas in Quebec drops by 6.4% in one year and the price of fuel oil in Montreal drops by 10.7% between April 2022 and April 2023. However, this drop does not bring prices down. gas and fuel oil at 2021 levels. The price of fuel oil in Montreal has still increased by 62.6% in two years, and that of gas in Quebec has increased by 31.7%.