I didn't mention the decline in house prices as much as the interest rate on mortgages. The mortgage interest is the biggest component of the monthly payment for most people, depending on the amount of down payment they have, but let's assume it's a first-time buyer with the minimum down payment.
Interest rates are already rising, by the way. Interest rates have gone up a lot. As we're speaking here today, I was looking at the markets and there's quite a change. That's going to feature into the CPI and that's going to push the shelter component measurement of CPI—which is the largest in the CPI, at 31%—higher. For a long time it's been too low, because the mortgage rates were low and going lower. They got under 2%. I've heard people bragging that they got a mortgage at one and a half per cent. It's unbelievable. That made inflation look small. At the same time, house prices were rising, but they didn't get reflected in the CPI.
Now, in a perverse way, the Bank of Canada's going to be raising rates in order to get inflation under control. The act of raising rates is actually going to have the effect of increasing CPI. It's going to look—initially, anyway—like they're not succeeding in getting inflation under control by raising rates, because it's going to push the actual number higher.
A lot of countries in the world use this method for CPI measurement and housing costs. There are some advantages, but there are, in certain circumstances, some big disadvantages to using the monthly payment system. We're going to see the worst of it here in the next little while.