New Housing Price Index, March 2013
The New Housing Price Index (NHPI) rose 0.1% in March, following a 0.2% increase in February. The month-over-month gains in the index have ranged from 0.1% to 0.3% for the past 12 months.
Calgary was the top contributor to the advance in March, up 0.3% from February. Builders indicated that increases in material and labour costs as well as market conditions were the main reasons for higher prices.
For the second month in a row, the largest monthly price advance occurred in Regina (+0.7%). This follows little or no change throughout the second half of 2012. Builders reported higher material and labour costs as the main reason for price increases in March.
Saskatoon and Windsor followed closely, with prices for new homes rising by 0.5% in both regions. This was the largest price increase in Saskatoon since April 2012, and the first increase this year, as builders cited higher land development costs as the primary reason for the advance. The increase in Windsor, the largest since February 2012, comes after nearly seven months of no price changes, with builders reporting they were no longer offering bonuses to stimulate sales.
Prices for new houses were also up from February in Winnipeg (+0.3%), Hamilton (+0.2%), and the combined metropolitan region of Toronto and Oshawa (+0.1%).
In March, prices decreased 0.2% in Vancouver, as builders lowered their prices to finalize sales. Prices were unchanged in 9 of the 21 metropolitan regions surveyed.
On a year-over-year basis, the NHPI rose 2.0% in the 12 months to March, following a 2.1% increase the previous month. Annual price increases at the national level have been decelerating since the start of 2013.
The main contributor to the advance was the combined region of Toronto and Oshawa, where the year-over-year increase in the contractors' selling prices was 3.2%. However, this was down substantially from the 6.2% reported in March 2012, as annual price increases in this region have been generally decelerating.
For the fourth consecutive month, Winnipeg recorded the largest year-over-year price movement in Canada. Prices were up 5.1% in March, compared with a 4.2% advance over the same period in 2012.
In Calgary, annual prices rose 4.3%, following an identical increase in February and several consecutive months of accelerating annual price increases. Other significant year-over-year increases occurred in Regina (+2.9%) and Halifax (+2.7%).
Among the 21 metropolitan regions surveyed, 3 posted 12-month price declines in March. The largest annual decreases were in British Columbia, where new housing prices continued to fall in both Victoria (-1.6%) and Vancouver (-0.7%). Annual prices fell by 0.1% in Charlottetown, the ninth consecutive month of year-over-year price declines for the region.
Note to readers
The New Housing Price Index measures changes over time in the selling prices of new residential houses agreed upon between the contractor 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).
The provincial government of British Columbia introduced legislation on May 14, 2012, announcing the return to a provincial sales tax on April 1, 2013. From April 1, 2012, until March 31, 2013, there are new housing transitional rebates in place. After the transition is complete, the provincial sales tax on building materials in British Columbia will be embedded in contractors' selling prices of new houses. These changes will be reflected in the New Housing Price Index as reported by respondents.
Effective April 1, 2013, in Prince Edward Island, the federal 5% GST is combined with a reduced 9% provincial tax to create a single 14% HST. Previously, only the GST (5%) was applied to new homes. Under the new rules, the tax applied to the purchase of a new home will be 14%.
The indexes are not subject to revision and are not seasonally adjusted.
The first quarter 2013 issue of Capital Expenditure Price Statistics (Catalogue number62-007-X) will be available in July.
The New Housing Price Index for April will be released on June 13.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; email@example.com) or Media Relations (613-951-4636; firstname.lastname@example.org).
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