According to Statistics Canada, the growth in new home prices slowed for the third consecutive month, rising 0.3 percent in December compared with November. Despite the recent slowdown, new home prices were up 4.6 percent year over year in December.
In a full-year 2020 analysis, new housing prices were up 2.1 percent in 2020 compared with 2019, though they had edged down 0.1 percent from 2018 to 2019.
The year started with prices up 0.7 percent from January to March at the national level. However, at the onset of the pandemic—as strict public health measures came into effect—the growth in new home prices paused, showing little or no movement in April (0.0 percent), May and June (both up 0.1 percent). The second half of 2020 saw most of the housing price gain—increasing 3.7 percent from June to December—despite the ongoing pandemic.
In an outlook for 2021, Statistics Canada said it expects the new reality of working from home to become part of the routine for many Canadians, which will continue to lead to higher demand for living spaces and for single-family homes in order to accommodate individual and family needs. These circumstances will further strengthen prices for single-family homes—especially in the relatively more affordable suburban markets. As a result, new home prices are expected to trend upward, especially in hotter markets where demand is high, because builders are selling homes very quickly and the inventory of available homes remains at historically low levels.