Canadian new home prices continue to climb

According to Statistics Canada, the New Housing Price Index (NHPI) in rose 0.2 percent in June, following a 0.1 percent increase in May. This continued a series of similar gains over the past 15 months.

Calgary was the top contributor to the national advance for the fifth consecutive month, as prices for new homes rose 0.5 percent in June. Builders reported an increase in material and labour costs as well as higher land prices as the main reasons for higher prices.

Prices also rose 0.5 percent in both Saskatoon and London. Builders in Saskatoon reported higher material costs, while builders in London cited market conditions as the main reason for the growth. This was the largest monthly price movement in London since November, 2012, when prices rose 0.6 percent. New housing prices in the region had shown little or no growth since that time.

Edmonton also saw a notable increase as prices for new homes rose 0.3 percent in June. This was the largest price movement in that region since March, 2012, when monthly prices rose 0.4 percent. Builders reported market conditions as the main reason for higher prices.

Prices decreased 0.2 percent in Hamilton, Windsor and Vancouver in June as builders in all three regions reported lower selling prices. This was the first decrease in Hamilton in six months.

Prices were unchanged in six of the 21 metropolitan areas surveyed.

On a year-over-year basis, the NHPI rose 1.8 percent in the 12 months to June, following an identical annual increase in May. Prior to that, annual gains in the index had been 2.0 percent or more since the second half of 2011.

The main contributor to the annual advance was Calgary, where the year-over-year increase in contractors’ selling prices was 5.3 percent. Annual price increases in the region have generally been accelerating since early 2012.

Year-over-year prices for new homes were also up 5.3 percent in the metropolitan area of Winnipeg, following a 5.8 percent increase in May.

Other significant year-over-year increases occurred in St. Catharines/Niagara (+3.4 percent), Halifax (+2.9 percent) and Regina (+2.5 percent).

Among the 21 metropolitan areas surveyed, Victoria (-1.4 percent) and Vancouver (-1.1 percent) posted the largest 12-month price declines in June. New housing prices in Kitchener/Cambridge/Waterloo (-0.1 percent) also edged down during this period.

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