Data quality, concepts and methodology: New housing price indexes 1997 Base

View the most recent version.

(Table 327-0005, 1997=100 Monthly 1981 to present)

Introduction

This index measures changes over time in the contractors’ selling prices of new residential houses, where detailed specifications remain the same between two consecutive periods.

For most metropolitan areas, new house price indexes are available from 1981, although figures from 1969 are recorded for selected areas. The 1997=100 series surveys 21 metropolitan areas to establish monthly indexes relating to the contractors’“total selling price”. The survey also collects contractors’ estimates of the current cost of the land. These estimates are independently indexed to provide the published series for land. The residual (selling price less land), which mainly relates to the current cost of the structure, is also independently indexed and is presented as the house series. The lots are usually serviced by builders except in Montreal and Quebec City where they are occasionally serviced by municipal governments and therefore the servicing costs do not enter into the contractors’ selling price.

Characteristics

General

Prices collected for this index relate to the 15th of the month or the nearest business date. Subsequently, the selling prices are adjusted for any changes in quality of the structure and the serviced lot. This index does not measure shelter costs and price changes for existing houses are excluded from these price surveys.

Commencing in January 1991, the New Housing Price Indexes (NHPI) reflect the termination of the Federal Sales Tax (FST) with the introduction of the Goods and Services Tax (GST). Since this index is based on contractors' selling prices for new homes, the GST paid by the final purchasers is excluded from index calculations.

Prices used

Contractors’ mid-month selling prices are collected directly in 21 metropolitan areas through a combination of quarterly visits and telephone contacts in other months.

Adjustments to prices

House prices reported by sample builders are adjusted for changes in quality of both the structures and the serviced lots including intangible variations of location to ensure similarity of specifications.

In cases where the prices reported by sample builders include the net GST payable they are adjusted to reflect prices that are equivalent to contractors’ selling prices excluding GST.

Weight base

To prepare a contractors’ selling price index for a metropolitan area, price reports from the sample of builders are given equal weights in index calculations. Amongst metropolitan areas, weights are derived from housing completions data.

The same procedure prevails for aggregating the independently derived land and structure series: equal weights within metropolitan areas and proportional weights among metropolitan areas. Weights for metropolitan areas are adjusted annually as described below.

Index formula

A Chain-Laspeyres index formula is used, the weights for which are derived from housing completions for the previous three years valued at prices for the 1997 base year.

Revisions

Indexes as published are final.

Historical data

January 1981 to April 2003 on a 1992 base for 21 metropolitan areas. (CANSIM Table 327-0005)

January 1981 to December 1997 on a 1986 base for 21 metropolitan areas. (CANSIM Table 327-0029)

Reference documents and further reading

For further information, contact Dissemination Unit at telephone: 613-951-4550, toll-free: 1-888-951-4550, fax: 613-951-3117, e-mail: ppd-info-dpp@statcan.gc.ca, Producer Prices Division, Statistics Canada, Ottawa, Ontario, K1A 0T6.

Next | Previous