New Housing Price Index

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The New Housing Price Index (NHPI) rose 0.3% in March, following a 0.1% increase in February. The index has been advancing since July 2009.

Between February and March, prices rose the most in London (+1.7%), followed by Montréal and Kitchener (both up +1.0%).

In London, builders continued to report higher operating costs. In Kitchener, builders reported new list prices.

In Montréal, builders increased their prices as a result of higher material costs, strong market conditions and higher land development costs.

Charlottetown (-0.5%) registered the largest monthly decline in March, followed by Hamilton and Edmonton (both down -0.3%).

In Charlottetown and Hamilton, some builders recorded lower negotiated selling prices. In Edmonton, some builders reported a decrease of their lot prices.

Year over year, the NHPI was up 1.6% in March, following a 0.9% increase in February. The growth in March was mostly due to higher prices in Vancouver.

The largest year-over-year rise was recorded in St. John's (+5.1%), followed by Winnipeg (+4.5%) and Vancouver (+4.3%).

Compared with March 2009, contractors' selling prices were also higher in London, Québec and Ottawa–Gatineau.

Among the 21 metropolitan regions, 3 registered 12-month declines in March: Victoria (-4.6%), Edmonton (-2.4%) and Charlottetown (-1.2%).

Note: The New Housing Price Index (NHPI) measures changes over time in the selling prices of new residential houses agreed upon between the builder and the buyer at the time of the signing of the contract. It is designed to measure the changes in the selling prices of new houses where detailed specifications pertaining to each 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 (GST) or the Harmonized Sales Tax (HST).

As of July 1, 2010, the HST will come into effect in Ontario and British Columbia. According to the Canada Revenue Agency, "[if] the written agreement of purchase and sale is entered into after June 18, 2009 (November 18, 2009, in British Columbia), and both ownership and possession of the house transfer to the purchaser after June 2010, the HST at 13% (12% in British Columbia) would apply to the sale." Several builders in Ontario and in British Columbia are already including the HST in the prices of some of their new houses.

The provincial sales tax on building materials in Ontario and in British Columbia is embedded in the contractor's selling prices of new houses. With the introduction of the HST in these two provinces, this provincial sales tax will be eliminated and replaced by the HST. As value added taxes are conceptually excluded from the index, this change may cause negative monthly variations in the index for some metropolitan regions in Ontario and British Columbia during the implementation period of the tax.

This release presents data that are not seasonally adjusted and the indexes published are final.

Available on CANSIM: table 327-0005.

Definitions, data sources and methods: survey number 2310.

The first quarter 2010 issue of Capital Expenditure Price Statistics (62-007-X, free) will be available in August.

The new housing price indexes for April will be released on June 10.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (613-951-4550; toll-free 1-888-951-4550; fax: 613-951-3117; ppd-info-dpp@statcan.gc.ca), Producer Prices Division.