The decline in inflation in May is bullish for short-term housing prices. Housing prices in Canada's major cities have increased significantly over the last five years, which anecdotal evidence suggests is partly due to greater investment in the market by foreign and immigrant investors.
Prices increased 1.2 percent in the 12 months leading up to May, a drop of 0.8 percent from the annual inflation rate in April, according to a report released by Statistics Canada today, a development that could keep interest rates low and help shore up housing prices in the near term.
The slowdown in inflation was due primarily to declines in natural gas and oil prices, smaller price increases for passenger vehicles, and a small decline in women’s clothing prices.
The inflation news could help boost short term housing prices, or forestall what some see as a coming correction in housing prices that are at bubble levels, as it reduces the likelihood that the Bank of Canada will increase interest rates.
The likely repercussions for the housing market are tempered by Finance Minister Jim Flaherty’s announcement yesterday that the federal government would tighten mortgage rules to reduce what his department sees as housing demand driven by speculation and funded by too much borrowing.
He said that the Canada Mortgage and Housing Corporation (CMHC), a government owned home mortgage guaranteer that insures 49 percent of Canadian home mortgages, would reduce the maximum term of mortgages it will insure from 30 years to 25 years and no longer insure mortgages for homes worth more than $1 million.
A survey done by staffing and HR firm Randstad has found that Chinese and Indian workers are more likely to have internet connections at work than Canadian workers. The surprising finding found that 93 percent of both Indian and Chinese workers reported having an internet connection at work, compared to 76 percent of Canadian workers.
Smartphone ownership is another category in which Canadian workers are behind their Chinese and Indian counterparts in the survey results. 47 percent of Canadian survey respondents reported privately owning a smartphone, while 84 percent of Chinese workers and 70 percent of Indian workers reported the same.
The exact sampling methodology of the survey is not known, so the results could be due to Chinese and Indian samples not being reflective of the broader labor markets in the respective countries. The sampling data came from established sampling firm, Survey Sampling International, giving some legitimacy to the results.
TIDEL Park, an IT Park in Chennai, India
The results at the very least point to newly emerged segments of the Asian economies that are deeply integrated with the internet and well-equipped with modern information technology.
Vice-president of marketing for Randstad Canada, Stacey Parker, said that possible reasons for the gap between Canadian and Asian survey results are a higher percentage of Canadian employers believing internet connections could distract their workers, and lower internet and mobile costs in Asian countries than in Canada.