New Home Prices Dropped 0.2% in February

Economy

Apr 15, 2018

Lower prices for new homes in Toronto were the main reason for a national price decline in February.

Following two consecutive months of no change, new home prices were down 0.2% nationally. This was the first decrease at the national level since July 2010. Recent mortgage rate increases along with tighter mortgage regulations are likely contributors to the decline.

Builders in Toronto reduced their prices by 0.6% in February, citing unfavourable market conditions. This was the second consecutive decline, and the largest for this census metropolitan area (CMA) in eight years.

Also in the Greater Golden Horseshoe, builders in both Oshawa and Hamilton reported price decreases of 0.1% for new houses, while prices in Guelph and Kitchener–Cambridge–Waterloo were unchanged.

All four surveyed CMAs in Alberta and Saskatchewan registered price declines in February. Builders tied the decreases to lower negotiated selling prices. According to the Canada Mortgage and Housing Corporation, the inventory of newly completed and unsold single-family dwellings rose in three of the four CMAs in February 2018 compared with the same month a year earlier. Single-family dwellings include row, single and semi-detached houses.

House prices were unchanged for a second consecutive month in all three CMAs in British Columbia.

Of the six CMAs reporting higher new house prices, Montreal (+0.6%) had the largest increase. Builders cited higher construction costs as the main reason for the gain.

Source: Statistics Canada, www.statcan.gc.ca/daily-quotidien/180412/dq180412b-eng.htm?CMP=mstatcan

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