March New House Prices Rise in 10 of 27 Cities

May 19, 2017

The New Housing Price Index (NHPI) rose 0.2% in March compared with the previous month. Higher new house prices in Vancouver and Toronto led the gain. Builders attributed the rise to market conditions, a shortage of developed land, and construction costs.

New house prices were up in 10 of the 27 metropolitan areas surveyed, with the largest increases in Oshawa (+1.1%) and Guelph (+0.9%). In Oshawa, builders cited higher construction costs and improving market conditions as reasons for the gain. Builders in Guelph linked higher new house prices to improving market conditions and a shortage of developed land.

Vancouver was the top contributor to the national gain, with prices up 0.7%. Builders reported market conditions as the main source of the rise. This was the first price increase in five months and the largest since May 2016.

Ottawa (+0.6%) and Windsor (+0.4%) also posted significant price gains. Builders in Ottawa reported market conditions, a shortage of developed land and higher construction costs as the key reasons for the increase, the largest since April 2011. In Windsor, builders tied the price rise to higher land development costs and improving market conditions.

In Toronto, prices edged up 0.2%, the result of favourable market conditions.

New house prices were down in three metropolitan areas and unchanged in 14.

New Housing Price Index, 12-month change

The NHPI rose 3.3% over the 12-month period ending in March, largely reflecting higher prices for new homes in Toronto (+8.4%). Other notable year-over-year increases were reported in Victoria (+6.3%), Windsor (+6.2%) and St. Catharines-Niagara (+6.0%).

In March, six metropolitan areas recorded 12-month price declines with St. John’s (-0.7%) posting the largest decrease.

Source: Statistics Canada, http://www.statcan.gc.ca/daily-quotidien/170511/dq170511a-eng.htm