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New Housing Price Index, May 2020

Released: 2020-06-18

New Housing Price Index — Canada

May 2020

0.1% increase

(monthly change)

New Housing Price Index — N.L.

May 2020

0.0%

(monthly change)

New Housing Price Index — P.E.I.

May 2020

0.6% increase

(monthly change)

New Housing Price Index — N.S.

May 2020

0.5% increase

(monthly change)

New Housing Price Index — N.B.

May 2020

0.0%

(monthly change)

New Housing Price Index — Que.

May 2020

0.0%

(monthly change)

New Housing Price Index — Ont.

May 2020

0.1% increase

(monthly change)

New Housing Price Index — Man.

May 2020

-0.1% decrease

(monthly change)

New Housing Price Index — Sask.

May 2020

0.1% increase

(monthly change)

New Housing Price Index — Alta.

May 2020

0.0%

(monthly change)

New Housing Price Index — B.C.

May 2020

0.0%

(monthly change)

New house prices edged up 0.1% at the national level in May following no change in April.

Impact of COVID-19 on the new housing market in May

As builders entered the second full month of modified operations since the outbreak, they continued to adapt to new challenges that come with operating virtually. For some builders, these adaptations may be offered permanently, as part of their regular services moving forward.

Although some COVID-19 restrictions eased for the construction industry, the strict safety protocols put in place continued to slow the pace of new home building, resulting in project delays and indefinite closing dates for buyers. At the same time, home buyers faced with employment uncertainty and the challenges of stay-at-home-routines had to reassess their purchasing decisions.

The continuing challenges from both the builder and buyer still adjusting to this new reality coincided with new home prices showing little or no change in 21 out of the 27 census metropolitan areas (CMAs) surveyed in May.

Chart 1  Chart 1: New Housing Price Index
New Housing Price Index

Ottawa bucks the national housing trend, with new home prices increasing

Ottawa (+1.0%) reported the largest increase in new home prices in May, continuing the upward trend that began in October 2017. Despite COVID-19, builders continued to report strong demand for new homes in the region. With population figures up 2.3% from last year, this population growth continued to provide support to a housing market where the inventory of available homes has been low.

Additionally, since the introduction of the Ontario Fair Housing Plan in April 2017, which was put in place to rein in rising house prices, Ottawa has become an attractive and affordable market compared with Toronto, and new home prices in Ottawa have risen by 22.7% since then.

New house prices unchanged in Vancouver and Toronto

Charlottetown saw new home prices increase 0.6% in May, with builders reporting favourable market conditions as the reason for the increase. New home builds as well as resale homes have been in high demand for the past few years on Prince Edward Island, mostly due to continued growth in population, as well as immigration, coupled with low vacancy rates.

New house prices in Canada's historically expensive housing markets, Vancouver and Toronto, were unchanged for the second consecutive month in May following price gains in February and March.

New house prices declined in Québec and Winnipeg (both down 0.1%) in May.

New Housing Price Index, 12-month change

At the national level, new house prices rose 1.1% year over year in May, following a 0.9% rise in April.

For the 11th month in a row, the largest year-over-year price increases occurred in Ottawa (+10.9%) and Montréal (+8.1%).

In May, for the fourth month in a row, new home prices decreased in Regina (-4.0%) and Calgary (-1.5%) year over year.

Chart 2  Chart 2: New house prices are up 0.1% at the national level
New house prices are up 0.1% at the national level

Outlook for the new housing market during COVID-19

As some parts of the economy slowly start to open with strict physical distancing rules in place, builders are catching up on completing homes under construction. Delays in housing construction and new phases of development, as well as lower new home sales are forecast to continue in the short term. We expect both buyers and builders to remain cautious when it comes to the buying and building of homes.

We also expect some overall dampening in the demand for new homes, as the Canada Mortgage and Housing Corporation's stricter policies take effect on July 1. The new policy, requiring higher minimum credit scores and lower debt servicing ratio among others, will be applied to all new applications for mortgage insurances with less than a 20% down payment. This new policy will primarily impact first-time home buyers.


  Note to readers

The New Housing Price Index (NHPI) measures changes over time in the selling prices of new residential houses. The prices are those agreed upon between the contractor and the buyer at the time of the signing of the contract. The detailed specifications pertaining to each new 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 provincial harmonized sales tax.

The survey covers the following dwelling types: singles, semi-detached and townhouses or row homes. The index is available at the national and provincial levels, and for 27 census metropolitan areas (CMAs).

The index is not subject to revision and is not seasonally adjusted.

In addition to this monthly release, the NHPI has also been integrated into the Residential Property Price Index (RPPI). The RPPI is a quarterly series that measures changes over time in the prices of residential properties for Montréal, Ottawa, Toronto, Calgary, Vancouver and Victoria. An aggregate for these six CMAs is also available. The RPPI provides a price index for all components of the housing real estate market—new and resale—in addition to a breakdown between houses and condominium apartments.

Products

The New Housing Price Index: Interactive Dashboard, which allows users to visualize statistics on new housing prices, is available.

The Housing Market Indicators Dashboard, which provides access to key housing market indicators for Canada, by province and by CMA, is also available.

For more information on the topic of housing, visit the Housing Statistics Portal.

The video "Producer Price Indexes" is available on the Statistics Canada Training Institute webpage. It provides an introduction to Statistics Canada's Producer Price Indexes: what they are, how they are compiled and what they are used for.

Statistics Canada has launched the Producer Price Indexes Portal as part of a suite of portals for prices and price indexes. This web page provides users with a single point of access to a wide variety of statistics and measures related to producer prices.

Next release

The New Housing Price Index for June will be released on July 21.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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