The rate of increase in new housing prices continued to ease

The rate of increase in new housing prices continued to ease in July for the sixth consecutive month. The growth rate of the index has been on a downward trend since September 2006, mainly due to the softening market in Western Canada.

Nationally, contractors' selling prices rose 2.7% between July 2007 and July 2008, a slower pace than the year-over-year increase of 3.5% in June.

On a monthly basis, prices rose 0.1% between June and July, resulting in a New Housing Price Index of 158.6 (1997=100).

Regionally, prices again rose at the fastest pace in Regina, which led the nation with a year-over-year price increase of 29.6%, down from its record increase of 34.0% in April of this year. On a month-over-month basis, new housing prices rose 2.6% from June. Builders reported that higher fuel and steel prices, as well as increased labour costs contributed to the higher prices.

In Saskatoon, the year-over-year increase was 13.1%, further confirmation of a trend of deceleration in this city. Many builders reported increased prices as a result of higher material and labour costs.

In Edmonton, the year-over-year change hit a 23–year low (-5.3%), and in Calgary (-0.3%), it was the lowest in 12 years. Markets in these cities continue to adjust after experiencing record price increases in the last two and a half years.

Builders reported that material and labour costs as well as higher land development costs have contributed to the fourth consecutive record increase in Newfoundland and Labrador. Buyers in St. John's saw a 24.3% gain on a 12-month basis. Homebuyers in Halifax saw prices rise 7.3%, up from 7.2% in June 2008.

On the West Coast, the 12-month increase for Vancouver was 1.6%. In Victoria, the year-over-year change in contractors' selling prices edged up from June (-0.4%) to July (- 0.1%).

In Toronto, contractors' selling prices were 3.7% higher than in July last year, and 4.3% higher in Ottawa–Gatineau.

In Montréal, the 12-month growth rate accelerated to 5.7%, while in Québec, prices increased 5.4%.

Available on CANSIM: table 327-0005.

Definitions, data sources and methods: survey number 2310.

The second quarter 2008 issue of Capital Expenditure Prices Statistics (62-007-XWE, free) will be available in October.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (613-951-9606; fax: 613-951-1539; prices-prix@statcan.gc.ca), Prices Division.