Canadian New-Home Prices Declined Month-Over-Month and Year-Over-Year in November

Statistics Canada (StatCan) reported on Monday (12-18-23) that its national new-home price index declined 0.2% in November. Prices were down or unchanged in 25 of the 27 census metropolitan areas (CMAs).

Year-over-year, new-home prices declined 0.9% in November. Prices were down in 20 of the 27 CMAs as measured by the survey.

New-home prices have declined year-over-year since April. StatCan said this is partially due to the rapidly increasing borrowing costs seen in Canada since the spring of 2022. From March 2022 to July 2023, the Bank of Canada increased the policy interest rate to rein in inflation. As mortgage rates climbed higher, demand for housing slowed over the same period, working to cool prices in the new housing market. In November, with the policy interest rate at 5.0%, the national index stood at 124.4, its lowest level since February 2022 when it was at 123.2 and the policy interest rate was at 0.25%.

According to StatCan, the largest annual declines in November were in Ottawa, down 4.7%, and Victoria, down 4.2%. The largest increases were reported in Québec, up 3.2%, and Calgary, up 2.4%.