New Housing Price Index, November 2021

Released: 2022-01-05

Nationally, new home prices increased 0.8% in November—continuing the string of monthly increases since May 2020. Prices were up in 16 of the 27 census metropolitan areas (CMAs) surveyed, unchanged in 9, and down in 2.

Chart 1 
New Housing Price Index

Record low housing inventory pushes up new home prices in some Ontario regions

The largest price increases for new homes were in London (+2.8%), Kitchener–Cambridge–Waterloo (+1.9%) and Toronto (+1.4%). In all three regions, a continuing high level of sales activity, record low levels of inventories in the resale sector, combined with higher construction costs in the new build sector, contributed to the rise of home prices in both sectors.

Following an 11.9% increase in October, the price of softwood lumber rose 5.3% in November as reported by the Industrial Product Price Index. With reduced output at Canadian lumber mills and labour shortages in the American mills, lumber prices are expected to continue to rise in the coming months, adding further pressure on the costs of building new homes.

Impact of flooding in British Columbia on the new housing market in November

As a result of historic rainfall and flooding in British Columbia, builders in Kelowna and in some parts of Vancouver were not required to report data. However, the immediate impact to the New Housing Price Indexes' response rates for November in these regions was minimal.

Damage incurred to major transportation routes in the Southwestern and interior regions of the province caused bottlenecks in the port of Vancouver. As they continue to clear the backlog of vessels unloading cargo, disruptions occurred in the supply chains of many commodities, including building materials.

New home prices up year over year in all CMAs surveyed, largest gains in Ontario

Nationally, new home prices rose 11.7% year over year in November.

New home prices were up in all 27 markets surveyed on a year-over-year basis, with the largest gains once again observed in Kitchener–Cambridge–Waterloo (+29.0%), Windsor (+22.8%) and Ottawa (+22.4%).

Chart 2 
New house prices rise at the national level

Outlook for the new housing market

The new housing market has seen rapid price growth throughout the pandemic in most cities. Paul Beaudry, the Deputy Governor of the Bank of Canada remarked that factors contributing to increased demand included low borrowing costs, incentivizing people to buy sooner than planned, higher savings, allowing for larger down payments, the anticipation of higher home prices in the future, and demand for larger sized homes outside of major cities to accommodate changes to living style. In addition to these factors, the mix of new home buyers has changed with year over year home purchases increasing more for investors than for first-time home buyers and repeat buyers.

Supply has been slow to catch up to the increased demand of new homes based on a number of factors such as construction lag times attributed to municipal land use planning, building regulations, as well as shortages of labour and building construction materials. Housing supply has been particularly low for Vancouver, Toronto and Montréal.

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; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).