New home prices continue to rise

Increasing land and labour costs are among the major contributors, as new home prices continue to rise across most of Canada.Statistics Canada’s New Housing Price Index (NHPI) rose 0.1 per cent in November. Provincially, gains in Alberta and Ontario were moderated by a decline in British Columbia.The census metropolitan area (CMA) of Calgary was the top contributor to the November growth, with prices up 0.3 per cent over the previous month. Builders cited market conditions, higher material and labour costs as well as higher land prices as the reasons for the increase.Hamilton recorded the largest monthly price increase in November, as prices rose 0.4 per cent for the second straight month. Builders reported increased city development charges and market conditions as the main reasons for the gain.New housing prices rose 0.3 per cent in the CMAs of Kitchener-Cambridge-Waterloo and London. Builders in both areas cited higher city development fees as the reason for the increase.In St. John’s, new housing prices rose 0.2 per cent in November after remaining unchanged for the previous four months. Builders cited higher material and labour costs as well as higher land values as the main reasons for the increase.Prices were unchanged in seven of the 21 metropolitan areas surveyed.New home prices fell 0.2 per cent in Vancouver, as builders reported lower negotiated selling prices. This was the first price decrease in Vancouver since July.Prices were also down 0.2 per cent in Charlottetown, as builders lowered prices on inventory homes to stimulate sales. New home prices in Charlottetown have been flat or falling since August 2013.In Ottawa-Gatineau, prices were down 0.1 per cent in November. Although several builders reported higher prices as a result of market conditions and city development fees, the increases were offset by other builders who reported lower negotiated selling prices and promotions to stimulate sales.On a year-over-year basis, the NHPI rose 1.7 per cent in November, the largest annual price movement since August 2013.Calgary (6.5 per cent) and the combined metropolitan region of Toronto and Oshawa (2.5 per cent) continued to lead the annual growth. Other significant year-over-year increases occurred in Hamilton (2.8 per cent) and London (2.0 per cent).Among the 21 metropolitan areas surveyed, seven posted 12-month price declines in November: Charlottetown (-1.9 per cent), Victoria (-1.1 per cent), Ottawa–Gatineau (-1.0 per cent), Vancouver (-0.6 per cent), the combined metropolitan region of Saint John, Fredericton and Moncton (-0.5 per cent) as well as Regina (-0.2 per cent) and Montreal (-0.1 per cent).This was the first annual price decline in Regina since 1985 and the first in Montreal since 1997.Related reading:New home prices on the rise