The New Housing Price Index (NHPI) rose 0.1% in May, following a 0.2% increase in April and continuing a series of similar increases over the past 12 months.
Calgary was the top contributor to the national advance in May, as prices for new homes rose 0.9%. Builders reported an increase in material and labour costs as the main reason for higher prices.
Prices increased 0.6% in both St. Catharines-Niagara and the combined region of Sudbury and Thunder Bay. Builders in both metropolitan areas cited higher material and labour costs as the main reason for the growth. This was the largest monthly price movement in Sudbury and Thunder Bay since May 2012, when prices rose 1.6%. Since then, new housing prices in the region have shown little or no growth.
Winnipeg also saw a notable increase as prices for new homes rose 0.5% in May. Monthly prices in the region have been rising since the beginning of 2012. Builders reported higher material costs for new homes sold, but not yet completed, because of the new provincial sales tax coming into effect in July.
Prices were unchanged in 5 of the 21 metropolitan areas surveyed.
On a year-over-year basis, the NHPI rose 1.8% in the 12 months to May, following a 2.0% annual increase in each of the previous two months. This was the smallest annual gain in the index since March 2010 (+1.7%).
The main contributor to the advance was the combined region of Toronto and Oshawa, where the year-over-year increase in contractors’ selling prices was 2.6%. Annual price increases in the region continued to show signs of slowing, following steady growth throughout 2011 and the early part of 2012.
Winnipeg has recorded the largest year-over-year price movements in Canada since December 2012. Prices for new homes were up 5.8% in May, following a 5.5% increase in April.
Other significant year-over-year increases occurred in Calgary (+5.3%), St. Catharines-Niagara (+3.3%) and Halifax (+2.9%). Annual price gains in all three regions have been generally accelerating throughout the latter part of 2012 and into 2013.
Among the 21 metropolitan areas surveyed, only Victoria (-0.7%) and Vancouver (-0.9%) posted 12-month price declines in May. This continued a stretch of 16 consecutive annual decreases in the two regions of British Columbia.
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 indexes are not subject to revision and are not seasonally adjusted.
The New Housing Price Index for June will be released on August 8.
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