According to Statistics Canada, nationally, new house prices were down 0.1 percent in May, after remaining unchanged for three consecutive months. In May, builders in 16 of the 27 census metropolitan areas (CMAs) surveyed reported flat or lower prices.
The largest declines of new home prices were in Saskatoon (-0.5 percent) and Victoria (-0.4 percent). Deteriorating market conditions were the primary reason for the decreases. The declines coincided with a higher unemployment rate in May in both CMAs. Saskatoon's unemployment rate has been above the provincial and national rate since October 2016. New residential listings were also down in Saskatoon (-4.0 percent) in May, according to the Canadian Real Estate Association.
New home prices were also down in Edmonton, Kelowna, Toronto and Vancouver (each down 0.3 percent).
Charlottetown (+1.0 percent) had the largest price increase in May, with the rise attributed to higher construction costs.
New house prices at the national level were unchanged year over year in May. Higher home prices, mortgage rate hikes and the federal government stress test remain some of the factors influencing the demand for housing. Potential buyers now need to save for a larger down payment in order to qualify for a mortgage.
In May, 11 CMAs reported year-over-year declines, led by Regina (-2.7 percent), Saskatoon and Victoria (each down 1.4 percent). New house prices continued to decrease on a year-over-year basis in Toronto (-0.6 percent) and Vancouver (-0.9 percent). According to the Canada Mortgage and Housing Corporation, the pace of new home construction slowed in these five CMAs year over year in May, with single-family housing starts down sharply in Regina (-42.1 percent), Toronto (-35.1 percent), Saskatoon (-25.9 percent), Vancouver (-16.2 percent) and Victoria (-11.4 percent).
Ottawa (+4.7 percent) recorded the largest movement among the 16 CMAs reporting year-over-year increases, followed by London (+3.0 percent) and Montréal (+2.7 percent). Federal measures have been put in place to cool the real estate market. At the same time, demand remains high in these CMAs.