Canadian new home prices up 0.7 percent in January

Thursday, 18 February 2021 20:28:56 (GMT+3)   |   San Diego

According to Statistics Canada, new home prices rose at their fastest pace since October, increasing 0.7 percent nationally in January.

New house prices were up in 22 of the 27 census metropolitan areas (CMAs) surveyed and were unchanged in 5 CMAs. The national index was up for the ninth consecutive month, linked primarily to the decreasing supply of new homes and continuing high demand, driven mainly by lower borrowing costs and consumer desire for more living space during the pandemic.

The national housing supply for new single-family homes (single-detached, semis and row houses) has been declining in recent years. According to the Canada Mortgage and Housing Corporation, housing completions for single-family homes in 2020 were down 2.2 percent compared with 2019 and down 15.2 percent compared with 2018. While demand has remained strong as a result of homes selling quickly, completed single-family homes still available for sale in December 2020 were down by almost one-third (-29.4 percent) compared with December 2019.

The largest price movements in January were in Hamilton (+3.9 percent) and Charlottetown (+3.3 percent), with builders attributing the increase mainly to higher construction costs.

The rise in new housing prices reported in Kitchener–Cambridge–Waterloo (+2.9 percent) resulted primarily from a shortage of developed land in the area.

Nationally, new house prices rose 5.4 percent year over year in January—the largest increase in over a decade (since March 2008).

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