Steady gains in construction costs are driving the upward trend
Pointing to the housing segment’s sustained resurgence since the economic reopenings late last year, new home prices nationwide grew by 1.2% monthly and 11% annually in March, according to Statistics Canada.
The month-over-month upswing was driven by increases in 18 of the 27 census metropolitan areas surveyed by StatCan. Prices were unchanged in nine CMAs from February to March.
On an annual basis, the strongest gains were seen in the Kitchener–Cambridge–Waterloo region (up by 24.4%) and in Winnipeg (up by 24.3%).
The continuous growth of construction costs is another major factor in price increases, industry players said.
“Softwood lumber prices were still rising (+8.3%) on a monthly basis in February. At the same time, prices for energy and petroleum products rose by 10% in January and 8.5% in February, as reflected in higher transportation costs and in higher operational costs for heavy machinery,” StatCan said.
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Additionally, the Bank of Canada’s rate hikes did not deter demand for new homes in more affordable population centres.
“For the third month in a row, Calgary (+4.1%) registered the largest month-over-month increase for the price of new homes in March,” StatCan reported. “Despite the increase in new listings, the overall inventory of resale homes remained low. This market favourable to sellers may have had an impact on the demand of new built homes as the low inventory levels on the resale market may have swayed some buyers towards the new home market, contributing to the rise of new homes prices over the last few months.”
