According to Statistics Canada, new house prices continued to increase in the majority of housing markets across the country in October.
Nationally, prices for new homes rose 0.8 percent in October following a 1.2 percent acceleration in September, with prices up in 21 of the 27 census metropolitan areas surveyed.
The global pandemic has affected the housing markets in many ways. For example, borrowing rates have fallen to historic lows and buyer demand has shifted towards larger homes. There has also been increased demand for homes in cities surrounding larger urban centers such as Toronto, Vancouver and Montréal. All of these factors have contributed to higher new home prices across Canada.
New home prices have risen 3.1 percent nationally since the beginning of the pandemic in March. In comparison, new home prices edged up 0.1 percent from March to October last year.
The Bank of Canada lowered its policy interest rate from 1.75 percent in January to 0.25 percent in late March to ease the impact of COVID-19 on the overall economy. This decrease led to historically low borrowing rates available to home buyers, which have contributed to the increased demand for homes since the global pandemic began. The latest housing affordability index also shows that affordability is improving—despite rising new home prices.
Nationally, the new housing market remained strong. Fewer (-20.5 percent) completed new single family (single, semi-detached and row) homes were available for sale in October compared with the same month in 2019, as reported by the Canada Mortgage and Housing Corporation.
Nationally, new house prices increased 3.9 percent year over year in October—the largest yearly increase since June 2017.