According to Statistics Canada, Canadian new house prices remained unchanged on a national basis in May, for a third consecutive month.
New housing prices were flat or declined in 15 of the 27 census metropolitan areas (CMAs) surveyed in May. Recent mortgage rate hikes, along with tighter mortgage regulations, may have slowed the demand for new homes. The Bank of Canada reported that the rate for a conventional mortgage on a five-year term increased from 5.14 percent to 5.34 percent in May.
Toronto new home prices were unchanged in May, following four consecutive months of declines. The Canada Mortgage and Housing Corporation reported that, year to date, housing starts in Toronto were down 36.2 percent in May compared with the same period in 2017, reflecting a slower pace of construction for row, single and semi-detached new houses.
Overall growth in housing prices in Vancouver has been stalled for five consecutive months. In February 2018, the foreign buyers tax was increased from 15 percent to 20 percent, among other measures put in place by the government of British Columbia to address housing affordability.
New house prices rose 0.9 percent year over year in May. This was the smallest increase since February 2010. The largest 12-month gains were in Ottawa (+5.2 percent), Vancouver (+4.8 percent) and London (+4.6 percent).
Among the five CMAs reporting declines, Saskatoon (-1.4 percent) and Toronto (-1.3 percent) recorded the largest 12-month decreases.