Not really. Rent is based on demand and landlords will take as much as the market will bear. It’s pretty much independent of mortgage rates.
Case in point, rent in Southwestern Ontario exploded in 2020 & 2021, when interest rates were low and have stayed pretty level since, even with the significant increase in rates.
Mostly no. The major drivers of price are supply and demand, not cost and demand. However, the “most profitable price” ( which is rarely the highest for those unfamiliar with economics ) does increase with the marginal cost. So the cost of production does play a role.
I’m not an economist so I could be wrong, but this is my thought process about it:
If a product becomes too expensive to produce for some companies, those companies will stop selling it.
Less companies selling the product = less offer
less offer = higher price.
Not really. Rent is based on demand and landlords will take as much as the market will bear. It’s pretty much independent of mortgage rates.
Case in point, rent in Southwestern Ontario exploded in 2020 & 2021, when interest rates were low and have stayed pretty level since, even with the significant increase in rates.
The price of everything is based on demand and offer. The price of production affects the offer.
Mostly no. The major drivers of price are supply and demand, not cost and demand. However, the “most profitable price” ( which is rarely the highest for those unfamiliar with economics ) does increase with the marginal cost. So the cost of production does play a role.
I’m not an economist so I could be wrong, but this is my thought process about it: If a product becomes too expensive to produce for some companies, those companies will stop selling it. Less companies selling the product = less offer less offer = higher price.