Market IntelligenceEconomy

Too Much Money Chasing Too Few Things

 

May 20, 2022

Written by 

Ryan Berlin

SHARE THIS

It’s horses for courses when it comes to inflation, with the price escalation experience varying significantly from coast-to-coast.

Inflation isn’t as uniform and ubiquitous as it is often treated. Consumer prices rise more quickly or slowly in different parts of the country. Additionally, the specific inflation rate any one individual faces reflects their particular spending patterns, and whatever the measure of inflation, it’s always a function of how prices are changing for the individual components in the consumer price index (like lemons and consulting services).

On this latter point, the annual change in the price of services in Canada has been quite stable over the past decade, oscillating between 1-3% leading up to the pandemic. Goods inflation, on the other hand, has been much more volatile—reflecting the prices of things like gasoline and food, both of which fluctuate considerably—ranging from periods of deflation to increases of up to 4.6% (again, in the decade leading up to the pandemic).

Today, inflation in goods is at 7.6%, while that of services is at 3.8%. Both are uncomfortably high, but for now, headline inflation is really being driven by the demand for products whose supply chains, in many instances, are hobbled. As this glitch in the matrix is mended through this coming year, price gains will ease.

https://cdn.rennie.com/images/images/023/421/544/original/e08ad6125182c5b7642cc1413acef33d.png

Gain more insights into our housing market by reading the Spring 2022 rennie landscape.

Twice a year, rennie intelligence produces the rennie landscape, which tracks various demographic and economic indicators that directly and indirectly influence our housing market here in Metro Vancouver. Our goal is to provide our community with a basis for evaluating the trajectory of the factors that collectively define the context for the real estate market.

Written by

Ryan Berlin

SHARE THIS

Subscribe to weekly market insights

Receive insights, analysis, and perspective from our rennie intelligence team on the Lower Mainland’s real estate market.

Related

blog-feature-media-clrsg6dnb3nkm0bsq0hp73ro8
steady as she goes
The Bank of Canada announced it would be maintaining its trend-setting interest rate at 5%, where it’s been since July 2023 following an unprecedented regimen of rate hikes in magnitude, duration, and speed.

Jan 2024

Article

4min read

blog-feature-media-clr17nbly3toc0cu2a746v5vu
a less distressing narrative about interest rates
Over the past year, much ink has been spilled over the not-insignificant impact that rising interest rates have had, and will have, on housing markets around the world, including here in Canada. This is a distressing narrative to be sure—but there are a couple of important, and often overlooked, qualifiers that are necessary to append to any discussion of rising borrowing costs to more fulsomely comprehend the situation we have on our hands.

Jan 2024

Article

8min read

thoughtful real estate.

rennie & associates realty ltd

copyright © 2024 rennie all rights reserved

3.24

privacy policy

terms

MLS® Reciprocity

Disclaimer: This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.

Disclaimer: This is not an offering for sale. Any such offering can only be made by way of disclosure statement. E&OE. The developer reserves the right to make changes and modifications to the information herein without prior notice. Photos and renderings are representational only and may not be accurate.