Canada August New House Price Index Report (Text)

The following is the text of the new house price index report for August released by Statistics Canada.

The New Housing Price Index (NHPI) rose 0.2% in August, following a 0.1% increase in July.

The combined metropolitan regions of Toronto and Oshawa, as well as Calgary, were the top contributors to the advance. In Toronto and Oshawa, market conditions were the primary reason for higher prices. In Calgary, builders reported that the main factors were increased material and labour costs, as well as market conditions.

The largest monthly price advance in August occurred in the metropolitan region of Québec (+0.6%), followed by London, which recorded a 0.5% increase. In both, the increases were primarily the result of higher material and labour costs.

Prices were unchanged in 9 of the 21 metropolitan regions surveyed in August. Monthly prices declined 0.4% in Victoria as a result of lower land prices. Prices fell 0.1% in Charlottetown, as some builders recorded lower negotiated selling prices.

On a year-over-year basis, the NHPI rose 2.4% in the 12 months to August, following a 2.3% increase in July. The main contributor to the advance was the combined metropolitan regions of Toronto and Oshawa.

The largest year-over-year increases in contractors’ selling prices occurred in Toronto and Oshawa (+4.7%), Winnipeg (+4.4%) and Regina (+3.5%).

Other significant year-over-year increases occurred in Québec (+3.3%) and Kitchener-Cambridge-Waterloo (+3.0%).

Among the 21 metropolitan regions surveyed, 4 posted 12- month price declines in August. The largest decrease was in Victoria (-3.0%).

Note to readers

The New Housing Price Index measures changes over time in the selling prices of new residential houses agreed upon between the contractor and the buyer at the time of the signing of the contract. It is designed to measure the changes in the selling prices of new houses where detailed specifications pertaining to each house remain the same between two consecutive periods. The prices collected from builders and included in the index are market selling prices less value added taxes, such as the Federal Goods and Services Tax or the Harmonized Sales Tax.

The provincial government of British Columbia introduced legislation on May 14, 2012, announcing the return to a Provincial Sales Tax on April 1, 2013. From April 1, 2012, until March 31, 2013, there are new housing transitional rebates in place. After the transition is complete, the provincial sales tax on building materials in British Columbia will be embedded in contractors’ selling prices of new houses. These changes will be reflected in the New Housing Price Index as reported by respondents.

The indexes are not subject to revision and are not seasonally adjusted.

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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