According to Statistics Canada, the New Housing Price Index (NHPI) rose 0.7 percent in May, following a 0.3 percent increase in April. This was the largest monthly advance since July 2007, and was mainly driven by higher new housing prices in the combined region of Toronto and Oshawa and in Vancouver.
The combined region of Toronto and Oshawa (+1.9 percent) was the top contributor to the national increase, recording the largest monthly price advance among the census metropolitan areas covered by the survey. Builders reported market conditions and the higher cost of land as the reasons for the gain—the largest observed in 27 years.
New housing prices also rose in Vancouver (+1.1 percent) and Victoria (+1.1 percent). Builders reported market conditions as the primary reason for the increases.
Other significant price gains were observed in St. Catharines–Niagara (+0.9 percent) and Windsor (+0.8 percent). Builders in St. Catharines–Niagara cited market conditions as the main reason for the rise, while builders in Windsor reported higher material costs and land development fees.
Prices were unchanged in 6 of the 21 metropolitan areas surveyed.
The NHPI rose 2.7 percent over the 12-month period ending in May, the largest increase at the national level since September 2010.