According to Statistics Canada, the national index for new home prices edged up by 0.1 percent month over month in August. Prices were unchanged in 16 of the 27 census metropolitan areas (CMAs) surveyed, up in 5 and down in 6 CMAs.
New home prices increased the most month over month in Calgary (+0.6 percent), Vancouver (+0.5 percent) and Sherbrooke (+0.4 percent). This was the fourth consecutive monthly increase in Calgary, with builders in the CMA noting construction costs as the reason for the price growth. The cost to construct a new house in Calgary rose by 1.1 percent (single-detached) and by 1.3 percent (townhouse) in the second quarter compared with the first quarter, as reported by the Building Construction Price Index.
In August, prices decreased the most month over month in Ottawa (-1.3 percent), followed by Saskatoon (-0.3 percent) and Oshawa (-0.3 percent). This was the eighth consecutive decrease in Ottawa.
According to the Canadian Home Builders' Association's Housing Market Index, builders' confidence in the residential construction sector remained low in the second quarter of 2023 (39.9) and well below the second quarter of 2022 (65.7), with builders noting challenges in converting prospective buyers into sales. In addition, some builders noted that discounts were needed to generate sales.
Ottawa recorded the largest year-over-year decline (-3.9 percent) in new home prices in August 2023. Higher mortgage rates have slowed the new housing market in Ottawa, with the Canada Mortgage and Housing Corporation reporting 53.8 percent more single family homes (single detached, semi-detached, and row) completed but not sold (unabsorbed inventory) in this CMA in August, compared with August 2022.
In August 2023, the largest year-over-year increases were reported in the CMAs of Québec (+3.5 percent), Calgary (+2.0 percent) and St. John's (+1.6 percent).