New Housing Price Index, December 2013
The New Housing Price Index (NHPI) rose 0.1% in December, following no change in November. Monthly price movements have fluctuated between 0.0% and 0.2% since June 2012.
The combined metropolitan region of Toronto and Oshawa (+0.2%) was the top contributor to the December advance, following four consecutive months of little or no change. Builders indicated that market conditions were the primary reason for the price gain — the largest in the region since July.
Prices also rose 0.2% in St. Catharines–Niagara, where builders reported higher material and labour costs. New home prices advanced 0.1% in Ottawa–Gatineau, the first monthly increase in that region following seven consecutive months of unchanged or declining prices.
Monthly prices were down 0.3% in Kitchener–Cambridge–Waterloo, following little or no change since August 2012. The decrease, the largest since May 2010, was mainly due to some builders offering free upgrade packages to generate sales.
Prices for new homes also declined in Windsor (-0.2%), as well as in Halifax, London and Vancouver (all down 0.1%). Builders in all four regions cited lower negotiated selling prices as the main reason for the December price decreases. This was the first monthly price decline in London since October 2010.
Prices were unchanged in 11 of the 21 metropolitan regions surveyed in December.
On a year-over-year basis, the NHPI rose 1.3% in the 12 months to December, following a 1.4% increase in November. This marked the fifth consecutive month of slowing growth.
The two main contributors to the annual advance were Calgary (+6.1%), and the combined metropolitan region of Toronto and Oshawa, where the year-over-year-increase in contractors' selling prices was 1.4% for the second month in a row.
In Regina, where the pace of annual increase has been accelerating over the last few months, new housing prices were up 3.5% in December compared with the same month in 2012.
Other significant year-over-year increases occurred in St. Catharines–Niagara and Winnipeg (both up 2.9%). This marked the smallest annual price gain in Winnipeg since January 2010, as the pace of growth in new home prices has been slowing since August.
Among the 21 metropolitan areas surveyed, 4 posted 12-month price declines in December: Ottawa–Gatineau and Vancouver (both down 1.1%), Victoria (-0.8%) and Edmonton (-0.2%). This was the first annual decrease in Edmonton since May 2010.
Year in review: A regional perspective
In 2013, the annual average increase in new housing prices was 1.8%, down from 2.4% in 2012. This was the smallest advance since 1999, when average new home prices rose 0.9%.
The Atlantic region (+1.7%), Quebec (+1.0%), Ontario (+2.1%), as well as the Prairies (+2.9%) all posted increases in 2013, while British Columbia (-1.0%) recorded a third consecutive annual decrease.
In the Atlantic region, price increases were attributable to higher material and labour costs, market conditions and land prices. Halifax recorded an average annual price gain of 2.5% over 2012, followed closely by St. John's (+1.8%). Prices in Charlottetown rose 0.5%, while the region of Saint John, Fredericton and Moncton saw prices edge up 0.3% in 2013.
In Quebec, where average increases in 2013 were almost identical in Québec (+1.1%) and Montréal (+1.0%), market conditions were cited as the primary reason for higher prices.
St Catharine's–Niagara (+3.1%) had the largest annual average price movement in Ontario, followed by the combined metropolitan region of Toronto and Oshawa as well as Hamilton (both up 2.5%). Builders reported that market conditions drove prices upwards in all three cities. Ottawa–Gatineau had the smallest average annual price increase in Ontario, with prices rising 0.3% in 2013. Land development costs were the primary reason for the modest increase in Ottawa–Gatineau.
In the Prairie region, Calgary's annual average prices rose 5.3% in 2013, the largest gain in six years. Winnipeg (+4.9%) also saw a significant annual price increase in 2013. Builders in both cities cited higher material and labour costs as well as a higher land prices as the primary factors contributing to price increases.
In British Columbia, average annual prices fell 1.3% in Victoria and 1.1% in Vancouver, as builders reported having to lower list prices to complete sales throughout 2013. This marked the sixth consecutive annual decrease for Victoria and the third for Vancouver.
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 or the Harmonized Sales Tax.
The index is not subject to revision and is not seasonally adjusted.
The New Housing Price Index for January will be released on March 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; 514-283-8300; email@example.com) or Media Relations (613-951-4636; firstname.lastname@example.org).
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