According to Statistics Canada, the national home price index edged down by 0.1 percent month over month in July, following two months of growth. Of the 27 census metropolitan areas (CMAs) surveyed in July, prices were unchanged in 12, down in eight and up in seven.
New home prices decreased the most month over month in Victoria (-0.8 percent) in July, followed by Greater Sudbury (-0.7 percent), Regina (-0.5 percent) and Ottawa (-0.5 percent), with builders in many CMAs noting weakened market conditions as the reason for the reported monthly declines. This was the second consecutive monthly decrease in new home prices in Victoria, and the seventh in Ottawa. Market conditions in July were impacted by the Bank of Canada's decision to increase the policy interest rate an additional 25 basis points, bringing the total rate to 5.00 percent, the highest since April 2001.
In July 2023, prices increased the most month over month in Sherbrooke (+1.2 percent), followed by St. John's (+1.0 percent).
Nationally, new home prices were down 0.9 percent year over year in July, in contrast to the increase of 7.5 percent recorded in July of the previous year. Borrowing costs have continued to rise since July 2022, contributing to the yearly decline in new home prices and slowing of the housing market. The Canada Mortgage and Housing Corporation reported 54.2 percent more single-family homes (single detached, semi-detached, and row) completed but not sold (unabsorbed inventory) nationally in July 2023, compared with July 2022.
Among the CMAs surveyed, Victoria (-3.7 percent) recorded the largest year-over-year decline in new home prices in July 2023, followed by Edmonton (-2.9 percent). A similar yearly decline was observed in the resale housing market in Victoria, with the Victoria Real Estate Board reporting a 3.5 percent year-over-year decline in the benchmark price of a single-family home in July.
In July, the largest year-over-year increases were reported in the Québec (+3.5 percent), Calgary (+1.6 percent) and St. John's (+1.6 percent) CMAs.