Mortgage interest costs in this country increased by the highest amount in over three decades in October, according to Statistics Canada.
In a report released Wednesday, it said the mortgage interest costs rose by 11.4 per cent on a year-over-year basis in October -- the largest increase since Feb. 1991 when it rose by 11.7 per cent.
Property taxes among other housing charges also increased annually by 3.6 per cent, compared to the 1.5 per cent rise in the same month last year.
Statistics Canada reported the overall consumer price index rose 6.9 per cent in October compared to a year ago, which was in line with economists’ expectations. Core inflation – which strips out volatile food and energy prices – jumped 5.3 per cent on an annual basis, down from September’s reading of 5.4 per cent.
While Canadian inflation remained steady, the government organization said acceleration of mortgage interest costs and higher gas prices were “moderated by slowing price growth for food.” Food prices were up 10.1 per cent last month, down slightly from 10.3 per cent the month before.
“Housing-related inflation looks quite sticky at this point,” Avery Shenfeld, chief economist at CIBC Capital Markets, wrote in a note to clients on Wednesday.
“Housing cost measures tied to mortgage interest payments are escalating at a more than 11 per cent pace as borrowers renew their obligations at higher rates.”