New House Prices Remain Stable in December

Febraury 22, 2018

In December, new house prices in Canada were unchanged for the first time since April 2015. Buyers in 15 of the 27 census metropolitan areas (CMAs) surveyed saw no price change. Increases in 8 surveyed CMAs across the country were offset by declines in the remaining 4. 

In the Greater Golden Horseshoe, prices for new houses were unchanged in four of the six surveyed CMAs. Guelph posted the lone increase (+0.1%). Builders in Toronto, Canada’s largest CMA, have not seen increases in prices in six of the previous seven months. In the neighbouring CMA of Hamilton prices fell 0.1% in December, following four months of no change.

Since the middle of 2017, there have been few price changes among surveyed CMAs in the Greater Golden Horseshoe. The Fair Housing Plan introduced in April 2017 as well as mortgage rate increases are among the factors that may help explain the limited new home price movement in the region.

In Vancouver, new home buyers saw prices rise 0.2% in December. Builders cited strong demand as the main reason for the increase.

Builders in Calgary (-0.2%) reported the largest new house price decline, linking it to weak market conditions and lower negotiated selling prices.

New Housing Price Index, 12-month change

New home prices were up 3.3% year over year in December, following a similar gain in November. Vancouver (+8.9%) and London (+7.3%) had the largest 12-month increases among the surveyed CMAs.

New house prices in Toronto were up 4.7% year over year in December.

Among the five CMAs reporting declines, Saskatoon (-1.6%) recorded the largest 12-month decrease. Year over year, prices in Saskatoon have been down since September 2015. Over that time, builders reported weak market conditions and lower negotiated selling prices as reasons for the price declines.

Source: Statistics Canada, https://www.statcan.gc.ca/daily-quotidien/180208/cg-a001-eng.htm