New home prices still falling in Calgary, Edmonton regions

Mario ToneguzziNew house prices keep falling in the Calgary and Edmonton regions.

The latest data, released Thursday by Statistics Canada, said builders in the Calgary census metropolitan area reported prices were down 0.1 per cent in May from April and they were off by 1.1 per cent year over year.

The federal agency’s New Housing Price Index also showed that new home prices in the Edmonton census metropolitan area dropped by 0.3 per cent month over month and by 0.9 per cent year over year.

In May, builders in 16 of the 27 census metropolitan areas (CMAs) surveyed across Canada reported flat or lower prices.

“The largest declines of new home prices were in Saskatoon (-0.5 per cent) and Victoria (-0.4 per cent). Deteriorating market conditions were the primary reason for the decreases. The declines coincided with a higher unemployment rate in May in both CMAs. Saskatoon’s unemployment rate has been above the provincial and national rate since October 2016. New residential listings were also down in Saskatoon (-4.0 per cent) in May, according to the Canadian Real Estate Association,” said StatsCan.

It said new home prices were also down in Kelowna, Toronto and Vancouver (each down 0.3 per cent). Charlottetown (+1.0 per cent) had the largest price increase in May, with the rise attributed to higher construction costs.

“Higher home prices, mortgage rate hikes and the federal government stress test remain some of the factors influencing the demand for housing. Potential buyers now need to save for a larger down payment in order to qualify for a mortgage,” added the federal agency.

“In May, 11 CMAs reported year-over-year declines, led by Regina (-2.7 per cent), Saskatoon and Victoria (each down 1.4 per cent). New house prices continued to decrease on a year-over-year basis in Toronto (-0.6 per cent) and Vancouver (-0.9 per cent). According to the Canada Mortgage and Housing Corp., the pace of new home construction slowed in these five CMAs year over year in May, with single-family housing starts down sharply in Regina (-42.1 per cent), Toronto (-35.1 per cent), Saskatoon (-25.9 per cent), Vancouver (-16.2 per cent) and Victoria (-11.4 per cent).

“Ottawa (+4.7 per cent) recorded the largest movement among the 16 CMAs reporting year-over-year increases, followed by London (+3.0 per cent) and Montréal (+2.7 per cent). Federal measures have been put in place to cool the real estate market. At the same time, demand remains high in these CMAs.”

Mario Toneguzzi is a Troy Media business reporter based in Calgary.

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