According to Statistics Canada, new home prices were up 1.2 percent in September following a 0.5 percent increase in August. New home prices increased in 24 of the 27 census metropolitan areas (CMAs) surveyed. Builders across the nation primarily linked the gain to higher construction costs, mainly driven by the impact of the pandemic on the demand and supply of labor and materials. The shift in buyer preference for larger homes also contributed to the rise in new housing prices.
Nationally, new house prices increased by 3.2 percent during the 12-month period ending in September, following a 2.1 percent year-over-year increase in August. The September rise in prices was the largest since January 2018.
New housing prices may continue to rise as demand for single-family homes remains high, as buyers continue looking for larger living spaces, Statistics Canada said. The higher cost of building materials, combined with historically low mortgage rates, could further contribute to the rise in new housing prices.