It can’t be explained by the differences between dwelling prices and house prices, as the annual inflation rate for June 2017 for the NHPI for houses was 3.9%, almost the same as the 3.7% rate for dwellings only. One glaring difference is that the NHPI data the CPI estimates are based on ignore condominium apartments, which are included in the Teranet HPI. StatCan now has a pilot study on new condo prices but it has not published any estimates yet, let alone incorporate condo prices in the replacement cost index. The bottom line is that the huge runup in housing prices since the Bank dropped the overnight rate in January 2015 has not been properly reflected in its target inflation indicator, even accepting the dysfunctional approach to measuring owner-occupied housing costs adopted. (If you are going to make depreciation expenditure, not net acquisition costs, the focus of your inflation measure, you can at least measure it properly.)