The annual housing inflation rate as measured by the Teranet HPI was 13.9% in March, up from 13.4% in April, so even if one accepts the dysfunctional way that the Canadian CPI calculates owner-occupied  housing in terms of central bank needs there is surely something wrong when the homeowners’ depreciation CPI has a 4.4% inflation rate in May, up from 3.9%, and other owned accommodation costs is at 4.1%, up from 3.5%. New housing price index data are the only data used in the CPI; even real estate commissions are proxied using new housing pricing data. However, the NHPI excludes condominium apartments, exclude existing homes and is likely still downward-biased in measuring house price inflation in major urban centres. This partly accounts for Canada’s bizarre situation: pinpointed by the BIS as the country with the most out-of-control house prices while both the Bank of Canada’s target inflation indicator and its operational guide are well under the 2% target rate.