New house prices edge up 0.1% month on month in Canada

New house prices edged up 0.1% in January with new homes in Ontario largely responsible for the rise, according to the latest index.

Among the 27 metropolitan areas covered by the index from Statistics Canada, new housing prices were up in 14, down in seven and unchanged in six.

Kitchener–Cambridge–Waterloo recorded the biggest month on month price gain of 1% and builders in the region cited a shortage of developed land as the reason for the rise, the largest since June 2012.

Other significant price increases were observed in St. Catharines–Niagara with a rise of 0.9% and London also up 0.9%. In St. Catharines–Niagara builders reported higher construction costs and improving market conditions as reasons for the rise. Builders in London tied the gains to higher construction costs.

Toronto was the top contributor to the national increase, recording a 0.2% gain in January. Higher land prices were somewhat offset by lower negotiated selling prices and bonus packages offered by builders to generate sales.

The largest monthly price decreases were recorded in Greater Sudbury with a fall of 0.8% and St. John’s down 0.4%. In both regions, the primary reason for the declines was lower negotiated selling prices.

Overall prices are up 3.1% year on year with Toronto the top contributor to the gain and also recorded the largest year on year price increase of 8% among the metropolitan areas surveyed.

Other notable year on year gains were recorded in St. Catharines–Niagara with a rise of 6.5%, Windsor up 5.7%, Victoria up 5.5% and Kitchener–Cambridge–Waterloo up 5.2%.

In January, five metropolitan areas recorded year on year price declines, with Saskatoon down 1.2% and Regina down 1%, posting the largest decreases.

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