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New Housing Price Index, December 2016

Released: 2017-02-09

New Housing Price Index — Canada

December 2016

0.1% 

(monthly change)

New Housing Price Index — N.L.

December 2016

0.0%

(monthly change)

New Housing Price Index — P.E.I.

December 2016

0.0%

(monthly change)

New Housing Price Index — N.S.

December 2016

0.0%

(monthly change)

New Housing Price Index — N.B.

December 2016

0.0%

(monthly change)

New Housing Price Index — Que.

December 2016

0.0%

(monthly change)

New Housing Price Index — Ont.

December 2016

0.1% 

(monthly change)

New Housing Price Index — Man.

December 2016

0.0%

(monthly change)

New Housing Price Index — Sask.

December 2016

0.3% 

(monthly change)

New Housing Price Index — Alta.

December 2016

0.1% 

(monthly change)

New Housing Price Index — B.C.

December 2016

0.0%

(monthly change)

The New Housing Price Index (NHPI) edged up 0.1% in December compared with the previous month, largely reflecting price increases in Ontario and Alberta. Prices have risen at the national level for 21 consecutive months.

Chart 1  Chart 1: New Housing Price Index
New Housing Price Index

New Housing Price Index, monthly change

Among the 21 census metropolitan areas (CMAs) surveyed, new housing prices were up in 10, down in 1 and unchanged in 10.

Kitchener–Cambridge–Waterloo (+0.8%) and St. Catharines–Niagara (+0.8%) recorded the largest price gains among the CMAs covered by the survey. Builders in Kitchener–Cambridge–Waterloo reported higher construction costs, a shortage of developed land and improving market conditions as reasons for the increase. In St. Catharines–Niagara, builders attributed the price increase to improving market conditions and moving to new phases of building with higher land development costs.

Prices rose 0.3% in Ottawa–Gatineau, Hamilton, Regina and Saskatoon. Builders in Ottawa–Gatineau cited market conditions and new phases of development as reasons for the gain. Builders in Hamilton reported improving market conditions and new phases of land development as reasons for higher prices.

In Regina, builders attributed the price increase to higher construction costs, while builders in Saskatoon pointed to market conditions as the primary driver for the rise.

New housing prices were unchanged in the combined region of Toronto and Oshawa after 22 consecutive monthly price increases.

New housing prices were down 0.1% in London. Builders identified lower negotiated selling prices as the main reason for the decline.

New Housing Price Index, 12-month change

The NHPI increased 3.0% over the 12-month period ending in December, reflecting gains in 16 of the CMAs surveyed.

Chart 2  Chart 2: The combined metropolitan region of Toronto and Oshawa posts the highest year-over-year price increase
The combined metropolitan region of Toronto and Oshawa posts the highest year-over-year price increase

The combined metropolitan region of Toronto and Oshawa (+8.0%) was the top contributor to the gain, recording the largest 12-month price increase among the CMAs surveyed.

Other notable year-over-year gains were observed in St. Catharines–Niagara (+5.7%), Victoria (+5.1%) and Windsor (+4.8%).

In December, five metropolitan areas recorded year-over-year price declines, with Saskatoon (-1.4%) posting the largest year-over-year decrease.

The evolution of new housing prices in Canada

As 2017 marks the 150th anniversary of Confederation, we took a look back at an aspect of new housing price movements in Canada.

Prior to the recession of the early 1990s, real estate speculation, growth in immigration and favourable interest rates contributed to upward pressure on prices for new housing. In March 1989, the NHPI at the Canada level posted a record year-over-year increase of 16.6%. Price gains were reported in 19 of the 20 metropolitan areas surveyed, led by the combined metropolitan region of Toronto and Oshawa (+32.7%) and Vancouver (+14.2%).

Following the March 1989 peak, the NHPI rose year over year at an increasingly slower rate for 16 consecutive months. Following no price change in August 1990, the NHPI posted year-over-year price declines for 17 consecutive months.

Chart 3  Chart 3: The evolution of new housing prices in Canada
The evolution of new housing prices in Canada

Chart 4  Chart 4: The evolution of new housing prices in Canada
The evolution of new housing prices in Canada


  Note to readers

The New Housing Price Index (NHPI) 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 townhouses or row homes. The current value of the structure is independently indexed and is presented as the house series. 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 index is available at the Canada and provincial levels and for 21 metropolitan areas.

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 provincial harmonized sales tax.

The index is not subject to revision and is not seasonally adjusted.

Upcoming changes to the New Housing Price Index

On March 9, 2017, with the release of the January 2017 NHPI data, a number of important changes will be introduced to increase the relevance of the index series. The NHPI basket will be updated with new weights for the 2017 series and its coverage will be expanded to include four new census metropolitan areas (CMAs): Kelowna, British Columbia; Guelph, Ontario; Trois-Rivières, Quebec; and Sherbrooke, Quebec. The weights used for the 2017 series will be based on a price-adjusted three-year average of the value of building completions for each metropolitan area for 2014 to 2016.

Data for periods prior to January 2017 will be obtained by linking the new NHPI series, where possible, with indexes in CANSIM table 327-0046.

For the first time, separate series will be published for Toronto, Oshawa, Ottawa–Gatineau (Ontario part), Ottawa–Gatineau (Quebec part) and Greater Sudbury. The new indexes for Toronto, Ottawa and Greater Sudbury will be linked to those previously published for the following combined cities: Toronto–Oshawa, Ottawa–Gatineau (Ontario/Quebec) and Greater Sudbury and Thunder Bay respectively. Thunder Bay will no longer be included in the NHPI.

The index base period, for which the NHPI equals 100, will become December 2016.

CANSIM tables 327-0046 and 327-0050 will be archived and replaced by tables 327-0056 and 327-0057 respectively.

Infographic: Producer Price Indexes at a Glance

The infographic "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (Catalogue number11-627-M), is available. This infographic demonstrates how producer price indexes for goods and services are calculated and why they are important for the Canadian economy.

Next release

The NHPI for January will be released on March 9.

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; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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