Rent, mortgage costs still concerning for Albertans despite cooling inflation

September 17, 2024 Canuck

Canada’s annual inflation rate has reached the central bank’s two per cent target for August, but many consumers in Alberta are still feeling the pinch of high costs for shelter, rents and mortgages.

The ease of price pressures was primarily helped by a drop in the prices of gasoline, telephone services, clothing and footwear, but mortgages and rents continue to cool at a tepid pace, maintaining their relentless rise.

That’s a concern for Calgarians like Kiesha Mastrodimos who recently had to move out of her Bridgeland apartment because of a $315 increase to her monthly rent.

The 28-year-old, who is a quadriplegic and uses a wheelchair with many accessibility needs, feels that the rising cost of living is putting many at risk of homelessness.

On July 9, she was given the notice of a rent increase which stipulated that she would have to commit to a year lease, as opposed to a month-to-month agreement.

“We were given only three weeks to make a decision. This price increase was detrimental for myself and many others in my building as we are low-income. Many of us are disabled and on AISH and we have accessibility needs that an average 90 per cent of other living situations do not accommodate,” Mastrodimos said.

“I fully understand that there is bound to be increases in rent but, as a low-income individual in an affordable low-income building, and according to affordable housing guidelines, I should not be paying more than 30 per cent of my income. With this rent increase, I was (to) be required to pay 69 per cent of my income.”

Kiesha Mastrodimos, 28, in her new apartment that she says is inaccessible for people in wheelchairs. (CTV News)

As a result, Mastrodimos is now living in a southeast Calgary apartment complex that is inaccessible for those in a wheelchair. She says she needs to leave her home to relieve herself because her bathroom is inaccessible.

Landlords feeling the pressure

As many Calgarians in the rental market feel the stress of having less money in their wallets each month, so do landlords who are facing higher costs to maintain their properties.

Shamon Kureshi, a board member of the Calgary Residential Rental Association (CRRA), says inflationary measures are leaving many landlords with no choice but to increase rent.

“All of those costs have gone up, things like lawn care, repairs, snow shovelling, that kind of thing and we hear it all the time from landlords who are just saying, you know, ‘my rents are up, but wow, condo fees have doubled too,’” he said.

“Landlords are paying an extra $400 a month compared to maybe two years ago in some cases and that’s just the environment we live in. They’re not really pocketing the money, they’re merely using it to sort of deal with these inflationary pressures that we’re seeing.”

Kureshi adds that the CRRA is assisting many landlords on how to reduce their costs with an extra focus placed on improving the efficiency of properties.

“So these are things like changing windows or furnaces to make for better cost savings in the operational sort of aspects of the property. Others are doing projects like mowing lawns or painting themselves to save money,” he said.

“A lot of landlords will also have to shop around a lot for mortgage rates as the inflation rates have changed a little bit lately, and so have the mortgage rates.

Hope for more rate cuts

ATB Financial Chief Economist Mark Parsons says the latest data released Tuesday is now fueling hopes for a 50 basis point interest rate cut by the Bank of Canada next month.

This follows the BoC reducing its key rate three times in a row, cutting by a cumulative 75 basis points to 4.25 per cent.

“The good news in this report is that we’re seeing price pressures ease across the board in the area of shelter, which has been the problem area, it’s a slower rate than before but they’re still rising faster in Alberta,” said Parsons.

“That’s because of the tighter housing market here, especially on rents, we are starting to see some signs of easing but it might not feel like two per cent inflation right now because prices have gone up so much for consumers the last three years.”

The consumer price index posted its smallest rate of increase since February of 2021 and the closely watched core price measures also cooled to their lowest levels in 40 months according to Statistics Canada.

Barring an unexpected change in the downward trajectory of the national inflation rate, ATB is calling for two more 25-basis point interest rate cuts (one on Oct 23 and one on Dec 11) and four more next year, bringing the policy rate down to 2.75 per cent.

View original article here Source