Canadian New Housing Price Index Declines 0.4% in October; Largest Monthly Drop Since 2009

On Friday, Statistics Canada (StatCan) reported the New Housing Price Index (NHPI) fell 0.4% in October, the largest monthly decline since April 2009. However, the picture was mixed across the country, as prices were down in 9 out of 27 census metropolitan areas (CMAs) surveyed, but unchanged in 11 CMAs and up in the remaining 7.

In October, the largest monthly declines were observed in Canada’s largest markets of Toronto, down 1.2%, and Vancouver, down 0.6%. Windsor also reported a decline of 0.6%. Builders attributed the price declines in these markets to weak market conditions, StatCan said. Toronto and Vancouver builders offered cash incentives and design credits to encourage new home sales.

Toronto has seen a decline in sales of new single-family homes, which include detached, semi-detached, and townhomes. According to Altus Group, in September (latest data available) sales were down 16% year-to-date. According to the Canada Mortgage and Housing Corporation (CMHC), in Vancouver, inventory of new single-family homes completed and unsold surged 48.8% year-over-year in September.

The largest monthly new-home price increase in October was reported in Winnipeg, up 0.4%. The increase in Winnipeg coincided with an active resale market where typical home prices are cheaper compared to the Canadian average, according to the Canadian Real Estate Association (CREA). The Winnipeg Regional Real Estate Board reported that sales rose 19% year-over-year for detached properties.

Nationally, the NHPI declined 0.2% year-over-year in October. The majority of the new housing markets surveyed in Canada (16 out of 27 CMAs) reported an annual decline. The largest declines were registered in Kitchener–Cambridge–Waterloo, down 2.8%; Ottawa, down 2.8%; and Toronto, down 1.5%. The largest increases were in the CMAs of Calgary, up 4.5%, and Trois-Rivières, up 3.1%.