New House Prices Remained Unchanged in August

Oct 16, 2018

New house prices at the national level were unchanged, despite growth in some markets.

In August, builders in 18 of the 27 census metropolitan areas (CMAs) surveyed reported flat or decreasing prices. The Canada-level index stood at 103.3 in August and has not risen above that mark since November 2017. Mortgage rate increases, along with tighter mortgage regulations, are likely contributing to the flatness observed across Canada.

Ottawa’s new housing market (+0.6%) registered the largest month-over-month gain in August. This was the 11th consecutive monthly price rise in that CMA, coinciding with an increasingly tight resale market. According to the Canadian Real Estate Association, new listings were down 8.5% in August compared with the same period in 2017.

Weakness in the housing markets in Alberta and Saskatchewan continued in August. New house prices declined in Regina (-0.7%), Edmonton (-0.5%) and Calgary (-0.4%), while prices in Saskatoon were unchanged. According to the Canada Mortgage and Housing Corporation, the inventory of newly completed and unsold single-family dwellings rose in all four CMAs—ranging from 11.4% in Saskatoon to 34.4% in Calgary—in August, compared with the same month a year earlier. Single-family dwellings include row, single, and semi-detached houses.

New Housing Price Index, 12-month change

New house prices rose 0.4% year over year in August, with annual price advances gradually slowing since October 2017.

The largest 12-month gains in August were in Ottawa (+4.9%) and London (+3.6%). Four out of the five CMAs reporting 12-month declines were in Alberta and Saskatchewan, with Regina (-2.1%) recording the largest decrease.

Source: Statistics Canada, https://www150.statcan.gc.ca/n1/daily-quotidien/181011/dq181011c-eng.htm