New home prices up in Canada by 0.2% in March, latest index shows
The price of new houses in Canada increased nationally by 0.2% in March led by gains in Vancouver and Toronto, the latest index figures show.
Overall they were up in 10 of the 27 metropolitan areas covered by the index from Statistics Canada surveyed with the largest rise recorded in Oshawa with growth of 1.1% and Guelph up 0.9%. New home prices were down in three metropolitan areas and unchanged in 14.
In Oshawa, builders cited higher construction costs and improving market conditions as reasons for the gain while builders in Guelph linked higher new house prices to improving market conditions and a shortage of developed land.
Vancouver was the top contributor to the national gain, with prices up 0.7%, the first price increase in five months and the largest since May 2016. Builders reported market conditions as the main source of the rise.
Ottawa recorded a month on month rise of 0.6%, the largest since April 2011 with a shortage of development land and higher construction costs affecting the market, according to builders while in Toronto, prices edged up 0.2%, the result of favourable market conditions.
Year on year home prices were up 3.3% nationwide led by a 8.4% rise in Toronto, 6.3% in Victoria, 6.2% in Windsor and 6% in Catharines-Niagara while six metropolitan areas recorded 12 month price declines with St. John’s posting the largest decrease at 0.7%.
According to the Canada Mortgage and Housing Corporation house prices increases in the City of Vancouver have had a spill over effect in surrounding British Columbia municipalities. Centres within commuting distance of Vancouver City experienced the strongest spill over effect but prices also increased in municipalities outside commuting range.
‘Price changes in the City of Vancouver are linked to prices in other municipalities, both on the way up and on the way down. The spill over effects take years to fully work through other markets and have varying degrees of strength,’ said Braden Batch, senior market analyst, with the Canada Mortgage and Housing Corporation.