New Housing Price Index, August 2022

Released: 2022-09-22

National overview

In August, new home prices for Canada increased 0.1% for the second consecutive month. In August, prices were unchanged in most of the 27 census metropolitan areas (CMAs) surveyed; prices were up in 4 CMAs and down in 1.

Chart 1 
New Housing Price Index

Rising interest rates keep moderating demand

Activity in the new residential construction sector was ongoing in August despite the continued turbulence in this market. Higher construction costs, caused by earlier supply chain disruptions and rising labour costs, pushed prices of new homes up and left developers with less flexibility to adjust to the market conditions. In the second quarter of 2022, the Canadian Home Builders' Association reported that 93% of builders indicated that lumber prices are a continued issue contributing to the increased prices of new homes. In contrast, on the resale market, prices were forced down by higher interest rates aimed to moderate demand. Multiple real estate associations across the country reported slowdowns in sales activity starting in April 2022, following the interest rate increases by the Bank of Canada that began in March 2022.

In Saskatoon, prices for new homes rose 0.9% in August, partly driven by the demand of new residents. In the first quarter of 2022, international migration (+3,755 people) offset interprovincial migration (-1,358 people) and resulted in a population increase of 2,397 people in Saskatchewan. According to the Saskatchewan Realtors Association, inventory levels for homes were below Saskatoon's average, especially for homes priced under $500,000, and overall inventory levels were 20% lower than in August 2021. The shortage of supply for more affordable homes contributed to the rise in prices of new homes in August. The Saskatoon MLS® Home Price Index (HPI) composite benchmark price was $383,300 in August, remaining more affordable compared with the national MLS® HPI composite benchmark price of $777,200.

New home prices rose 0.3% in Kitchener–Cambridge–Waterloo in August, following a 0.7% decrease in July. Sales of homes increased in August by almost 19% compared with July, as reported by the Waterloo Region Association of Realtors. Only the average price of resale detached single family homes showed a monthly increase (+1.1%) in August, as opposed to other property types which all declined.

Chart 2 
New house prices rise at the national level

Year-over-year price changes still increasing

Nationally, the year-over-year growth continued to moderate in August, with new home prices rising 6.9%, the smallest increase since January 2021.

Calgary (+14.9%) once again recorded the largest year-over-year increase in new home prices, followed by Winnipeg (+13.4%) and Kitchener–Cambridge–Waterloo (+11.9%).

Contact information

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