New Housing Price Index February 2008

Statscan - The increase in new housing prices in Canada slowed in February, following two consecutive months in which the rate of growth was gaining speed. This deceleration continues the downward trend that started in September 2006.

Nationally, contractors' selling prices rose 6.2% between February 2007 and February 2008, a slower pace than the year-over-year increase of 6.5% in January.

Prices rose 0.3% between January and February, resulting in a New Housing Price Index of 158.1 (1997=100).

Regionally, prices again rose at the fastest pace in Saskatoon, which led the nation with an annual price increase of 58.3%, the fastest increase on record for this city. Housing prices rose 4.3% in February compared with a month earlier.

In Regina, the year-over-year increase was 28.6%, up from the annual growth rate of 25.9% recorded in January. Regina's new housing prices jumped 7.0% between January and February. Many builders reported higher prices as a result of increased material costs and a labour shortage that has resulted in higher labour rates.

The markets in both Saskatoon and Regina continue to be strong. Demand for new housing is high in Saskatchewan due to a strong natural resource sector and aggressive efforts to attract migrants to alleviate the labour shortage in the province.

In Edmonton, the 12-month growth rate slowed in February to 14.8%, the seventh month in a row in which the pace of growth has decelerated.

In Calgary, prices rose 5.2% between February 2007 and February 2008, slightly slower than the 5.6% year-over-year increase in the previous month.

Edmonton and Calgary are experiencing slower market conditions. With some migrants leaving the province, there are many resale houses on the market, making for slower new housing sales. This has resulted in both cities showing price declines on a monthly basis. In Edmonton, prices were down 0.9% from January, and in Calgary, they were down 0.3%.

Builders reported that material and labour costs as well as increased demand and higher land developments costs have contributed to record increases in Newfoundland and Labrador and Nova Scotia. Buyers in St. John's saw a 12.2% gain on a 12-month basis. Homebuyers in Halifax saw prices rise 11.4%, unchanged from January 2008.

On the West Coast, the 12-month increase for Vancouver was 6.6%. In Victoria, the year-over-year increase in contractors' selling prices was 1.6%, unchanged from January.

Windsor recorded year-over-year inflation for the first time in 17 months, with prices rising 0.3% from February 2007.

Elsewhere in Ontario, contractors' selling prices were 4.4% higher than in February last year in Toronto and Oshawa, and 3.3% higher in Ottawa–Gatineau.

In Montréal, the 12-month growth rate accelerated to 4.7%, while in Québec, prices increased 4.0%. In both, a competitive market and increased material and labour costs continue to be the main factors contributing to the higher prices.