New Housing Price Index, August 2014
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Released: 2014-10-09
The New Housing Price Index (NHPI) rose 0.3% in August, following no change in July. The increase was the largest since January and mainly the result of strong gains in Ontario and Alberta.
Chart 1
New Housing Price Index
The combined metropolitan region of Toronto and Oshawa was the top contributor to the August growth, with prices up 0.3% over the previous month. Builders reported new list prices and market conditions as the primary reasons for the increase.
The census metropolitan area (CMA) of Calgary (+0.5%) recorded the largest monthly price increase in August. Builders reported that land development costs, as well as strong market conditions and increased demand, were the main reasons for the price gain.
New housing prices were up 0.3% in the CMAs of Hamilton, Kitchener–Cambridge–Waterloo and Vancouver. In Hamilton—where prices have climbed for seven consecutive months—builders cited increased development charges and higher material and labour costs as the reasons for higher prices. The price increase in Kitchener–Cambridge–Waterloo, the largest in six months, was principally due to market conditions. In Vancouver, builders cited higher material and labour costs, as well as improved market conditions as the main factors contributing to the rise in prices. This was the first price increase in Vancouver since July 2013.
New housing prices rose 0.2% in Edmonton as builders reported higher land developments costs. The CMAs of Ottawa–Gatineau, St. Catharines–Niagara and London all saw a 0.1% increase in new home prices—mainly the result of higher city development charges. This was the first price increase in Ottawa–Gatineau in six months.
Prices were unchanged in 7 of the 21 metropolitan areas surveyed.
Builders reduced prices to stimulate sales in the combined area of Saint John, Fredericton and Moncton as new housing prices fell 0.3%. This was the largest decrease in the area since February 2012.
Prices declined 0.2% in Regina and 0.1% in Victoria, both primarily as a result of lower negotiated selling prices. This was the first price movement in Victoria since March.
On a year-over-year basis, the NHPI rose 1.5% in August, up slightly from the July increase of 1.4%. Calgary (+6.8%) and the combined metropolitan region of Toronto and Oshawa (+2.3%) continued to lead the annual growth.
Other significant year-over-year increases occurred in Hamilton (+3.0%), St. Catharines–Niagara (+2.3%), London and Saskatoon (both up 2.2%).
Among the 21 CMAs surveyed, 7 posted 12-month price declines in August: Charlottetown (-1.6%), Vancouver (-1.2%), Ottawa–Gatineau (-1.1%), Victoria (-0.9%), Saint John, Fredericton and Moncton (-0.3%) as well as Halifax and Edmonton (both -0.1%). This was the first annual decrease in the combined area of Saint John, Fredericton and Moncton since January 2013.
Chart 2
Calgary posts the largest year-over-year price increase
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 survey covers the following dwelling types: single dwellings, semi-detached houses and row houses (town houses or garden homes). The survey also collects contractors' estimates of the current value (evaluated at market price) of the land. These estimates are independently indexed to provide the published series for land. The residual (total selling price less land value), which mainly relates to the current cost of the structure, is also independently indexed and is presented as the estimated house series.
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 September will be released on November 13.
Contact information
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; infostats@statcan.gc.ca) or Media Relations (613-951-4636; statcan.mediahotline-ligneinfomedias.statcan@canada.ca).
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