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Elevated rent prices are largely to blame for the higher housing costs in August, with Statistics Canada noting that the rising cost of homeownership has pushed more people into the rental market.
On Tuesday, the agency reported inflation for the month of August climbed to four per cent, largely driven by higher gas prices.
Housing costs also rose, as shelter prices climbed six per cent year-over-year for the month of August and the rent index climbed 6.5 per cent for the month.
Statistics Canada suggested higher interest rates have made homeownership harder to obtain, which has in turn pushed more people into the rental market and driven up the demand for rental properties.
“Among other factors, a higher interest rate environment, which may create barriers to homeownership, put upward pressure on the (rent) index,” the agency said in its monthly report.
In total, rent prices grew in eight provinces, led by Nova Scotia at 9.5 per cent and Newfoundland and Labrador at 8.4 per cent.
The mortgage interest cost index also climbed from 30.6 per cent in July to 30.9 per cent in August.
Housing prices have been a hot-button issue in Ottawa as the government looks at ways to address a nationwide housing shortage. Last week, the federal Liberal government announced the removal of all GST on new rental builds, a move that some developers have applauded.
With files from The Canadian Press