Over the past year or so, you’ve probably noticed that the cost for everything, from groceries, gas, and housing to electronics and everything else, has skyrocketed. And like most Canadians, you’re probably wondering if prices for things will ever come down or if these elevated costs are here to stay.
Many experts believe that these high prices are here permanently and that the market will eventually adjust. But a surprisingly large number of those who responded to the Bank of Canada’s quarterly consumer expectations survey think otherwise. According to this survey, more than 25% of Canadians think that the current high prices in our economy will drop and level out within five years.
Unfortunately, deflation over the next five years is unlikely. Although some prices, including those for gasoline, will likely come down, the higher prices for goods will solidify and become part of our economy. The longer high prices remain, the more people will start to view them as normal and part of people’s expectations.
One of the reasons respondents to this survey were so optimistic about the cost of goods coming down is that supply chain pressures, exacerbated by the global pandemic, have started to ease fairly quickly. Although the prices for some goods have fallen over recent months, this does not necessarily mean that broad-based deflation will affect the entire economy.
If you have wanted to purchase a home, you may have noticed that while some prices are falling, mortgage rates continue to increase. However, this should not keep you from applying for a loan and meeting your homeownership goals. Contact us at Donna Mullen & Associates today to apply for a mortgage and trust us to help you find the best rate possible.