New house prices rose 0.9% year over year in May across Canada, the smallest increase since February 2010: StatsCan

Mario Toneguzzi on new home prices in Calgary, EdmontonNew home prices in Calgary and Edmonton remained relatively stable in May, according to Statistics Canada.

The federal agency reported on Thursday in its New Housing Price Index that prices in Calgary were down 0.1 per cent from April but remained the same in Edmonton.

On an annual basis, new home prices in Calgary were flat while they declined by 0.4 per cent in Edmonton.

Nationally, StatsCan said new housing prices were flat or declined in 15 of the 27 census metropolitan areas (CMAs) surveyed in May.

“Recent mortgage rate hikes, along with tighter mortgage regulations, may have slowed the demand for new homes. The Bank of Canada reported that the rate for a conventional mortgage on a five-year term increased from 5.14 per cent to 5.34 per cent in May,” it said.

Toronto new home prices were unchanged in May, following four consecutive months of declines. Canada Mortgage and Housing Corp. reported that, year to date, housing starts in Toronto were down 36.2 per cent in May compared with the same period in 2017, reflecting a slower pace of construction for row, single and semi-detached new houses, said the federal agency.

“Overall growth in housing prices in Vancouver has been stalled for five consecutive months. In February 2018, the foreign buyers tax was increased from 15 per cent to 20 per cent, among other measures put in place by the government of British Columbia to address housing affordability,” it added.

Among the 12 CMAs reporting gains in May, the largest increases were in Guelph, London and Windsor (+0.3 per cent in each), said the federal agency.

“Despite the higher new home construction costs reported in several CMAs, increases were partly offset by builders offering incentives, such as promotional packages, rebates, and design credits, to promote sales in slowing housing markets,” said Statistics Canada.

New house prices rose 0.9 per cent year over year in May across Canada, the smallest increase since February 2010. The largest 12-month gains were in Ottawa (+5.2 per cent), Vancouver (+4.8 per cent) and London (+4.6 per cent).

Among the five CMAs reporting declines, Saskatoon (-1.4 per cent) and Toronto (-1.3 per cent) recorded the largest 12-month decreases, according to StatsCan.

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.


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