New Housing Price Index, September 2020
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Prices of new homes surged across the nation in September, the largest jump in 14 years.
Nationally, prices were up 1.2% in September following a 0.5% increase in August. New home prices increased in 24 of the 27 census metropolitan areas (CMAs) surveyed. Builders across the nation primarily linked the gain to higher construction costs, mainly driven by the impact of the pandemic on the demand and supply of labour and materials. The shift in buyer preference for larger homes also contributed to the rise in new housing prices.
New Housing Price Index, monthly change
Victoria (+2.5%) and Hamilton (+2.3%) reported the largest monthly increases in September. Both CMAs, which offer affordable and large properties relative to larger city centres, are becoming more attractive choices for potential homebuyers who are able to work from home.
Other larger increases this month were in Ottawa (+2.2%) and Charlottetown (+2.0%). According to RE/MAX's Charlottetown Housing Market Outlook (fall 2020), following the initial impact of COVID-19, residential market activity in Charlottetown increased, pushed by growing demand from off-island buyers.
Prices were also up in Canada's most expensive housing markets of Vancouver (+2.0%) and Toronto (+0.8%), as a strong resale market has also increased demand among buyers for new single-family homes. According to the Toronto Real Estate Board, the average number of days that properties were listed for sale fell by one-third (from 34 days to 22 days) year over year in September. The Real Estate Board of Greater Vancouver reported that total residential home sales in September (3,643) in the Metro Vancouver region were 44.8% above the 10-year September sales average and this was the highest total on record for the month.
Regina (-0.3%) and Saskatoon (-0.2%) were the only two CMAs with lower new home prices in September.
New Housing Price Index, 12-month change
Nationally, new house prices increased by 3.2% during the 12-month period ending in September, following a 2.1% year-over-year increase in August. The September rise in prices was the largest since January 2018.
Ottawa (+12.9%) continued to lead in terms of year-over-year new housing price increases, followed by Montréal (+6.7%). Low inventory and high demand have continued to push prices up in these two CMAs for the past two years.
Alberta and Saskatchewan, both of which were impacted by declines in the resource sectors, reported year-over-year price declines in September, with Regina (-4.7%) reporting the largest decrease, followed by Calgary and Edmonton (both down 0.6%), as well as Saskatoon (-0.3%).
New house prices expected to continue to increase in the short term
New housing prices may continue to rise as demand for single-family homes remains high, as buyers continue looking for larger living spaces. The higher cost of building materials, combined with historically low mortgage rates, could further contribute to the rise in new housing prices.
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.
The article "The resilience and strength of the new housing market during the pandemic" examines the changes in new home prices in Canada for the 27 surveyed CMAs captured in the NHPI and compares the ranking of cities based on prices six months into the pandemic (August compared with February).
A study on "Price trends and outlook in key Canadian housing markets" looks at where the housing market was at the onset of the COVID-19 pandemic, sheds light on what has happened since then, and explores the challenges of the Canadian market going forward.
The infographic "The impact of COVID-19 on Key Housing Markets," part of the series Statistics Canada – Infographics (), is available. It provides an outlook of the housing market before, during and after COVID 11-627-M-19.
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.
The New Housing Price Index for October will be released on November 20.
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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