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BMO Says Canada's Shelter Cost Inflation Should Stay Muted, Keeping Pressure Off CPI

BY MT Newswires | ECONOMIC | 01/23/26 09:19 AM EST

09:19 AM EST, 01/23/2026 (MT Newswires) -- Canadian new home prices continued to slip in December, Bank of Montreal (BMO) noted.

Among highlights, BMO noted the house-only component of the index dropped 0.2% month over month from the previous month, pushing the year-ago contraction lower still and pointing to further relief in homeowners' replacement costs in January, noted the bank.

Unsurprisingly, BMO said, the story varies drastically across the regions. Prices are still up from a year ago in more affordable areas like Quebec, the Atlantic provinces, and most of the Prairies. Prices are down in Alberta, as an earlier affordability-driven runup has lost steam.

The relatively expensive markets are keeping prices below year-ago levels in British Columbia and Ontario, helped by a supply glut in the latter province, it added.

More broadly, BMO said shelter cost inflation should remain favorable as long as affordability keeps a lid on homebuying and stagnant population growth weighs on rents. That will keep some of the pressure off consumer price index inflation while core measures remain above the 2% target, it added.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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