Canadian New-Home Prices Increase for Second Consecutive Month in May

On Thursday, Statistics Canada (StatCan) reported that new-home prices increased for the second consecutive month in May. The national index increased 0.2% month-over-month in May, and prices were up in 10 of the 27 census metropolitan areas (CMAs) surveyed. This was the first month since June 2022 that prices increased in 10 or more CMAs.

According to the Building Construction Price Indexes for Q1, the cost to build residential homes has been gradually rising for both single-detached homes and townhouses.

StatCan reported that the largest month-over-month increases in May were reported in Trois-Rivières, up 2.0%; Calgary, up 1.3%; and Halifax, up 1.1%. Builders in these CMAs attributed the price gains to construction costs and improving market conditions. Meanwhile, Trois-Rivières is one of the most affordable cities in Canada.

The largest monthly declines of new housing prices in May were recorded in London, down 0.8%, and Kitchener-Cambridge-Waterloo, down 0.4%, as a result of weaker market conditions due to elevated borrowing costs.

Year-over-year, the national index was flat. This marks the first non-negative year-over-year change since March 2023.