New-home prices continue to creep up

New-home prices continue to creep up

Seventh straight monthly increase

The latest data show a steady rise in prices for new homes in Canada, though lacking the dramatic kind of gains being seen in the resale market.

Statistics Canada’s new-home price index, released yesterday, rose 0.4 per cent in January from the month before, the same growth rate for the third consecutive month. It also marked the seventh straight monthly increase.

Home prices were up 0.1 per cent on an annual basis in January, compared with a 0.9- per-cent decline in December 2009.

“This was the first year-over-year increase since December 2008, mostly as a result of price decreases in western Canada that were less pronounced this January than in previous months,” Statistics Canada said.

Douglas Porter, deputy chief economist with BMO Capital Markets, noted that, in comparison to the resale market, it has taken several more months for prices of new homes to recover to the point of passing year-earlier levels.

He also said that the modest gains seen in new-home prices cast doubt on warnings that a housing bubble is developing in Canada.

“It certainly suggests things have recovered and turned the corner, but this is not even in the same universe as a bubble,” Porter said. “To have prices basically unchanged within the last year is certainly no one’s definition of a bubble.”

By contrast, the Canadian Real Estate Association’s data from January showed the average price of homes in the resale market up almost 20 per cent from a year ago to $328,537.

The new-housing price index for January saw the biggest increases in St. John’s, N.L., at 1.7 per cent, Winnipeg at 0.7 per cent, and Toronto and Oshawa, Ont., at 0.6 per cent. Ottawa-Gatineau, Saskatoon and Calgary all registered 0.5-per-cent increases.

The largest monthly decrease in new-housing prices was recorded in the St. Catharines-Niagara region of Ontario, where prices fell by 0.4 per cent. Home prices in Charlottetown fell 0.2 per cent, and in New Brunswick, Saint John, Fredericton and Moncton each registered declines of 0.2 per cent.

On a year-to year basis, Quebec City was showing the biggest rise in new-home prices, 6.2 per cent.

Posted via web from Toronto Real Estate News | Blog

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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