New Housing Price Index

September 2005 – New housing prices were up 0.6% compared to August. The 12-month increase grew to 4.9% from 4.6% the previous month.

Building materials and labour cost increases combined with higher energy costs were partially offset by moderating demand for new housing. Nonetheless, prices at the national level increased substantially. Land value increases contributed to price hikes in 9 of the 21 metropolitan areas surveyed. In Winnipeg, builders cited a shortage of serviced lots.

According to the New Housing Price Index (which is based on contractors’ selling prices of new homes in 21 metropolitan areas), the price of new homes rose 0.6% on a monthly basis, up from the 0.4% increase in August.

The New Housing Price Index (1997=100) rose to 130.8 in September.

Of the 21 metropolitan areas surveyed, 18 posted monthly gains. Calgary led the way with a 1.8% increase followed closely by Saskatoon at 1.7%. Price increases for these two metropolitan areas were affected in large part by higher material costs, in particular lumber, and higher fuel costs which upped transportation and operating expenses. Labour and land costs were also a factor in both metropolitan areas. In Saskatoon, increased land costs were a result of higher development costs and levies.

Halifax (+1.6%), Winnipeg (+1.6%), Edmonton (+1.4%) and Victoria (+1.2%) posted significant increases, mostly due to higher material, labour and land costs.

Monthly increases were also registered in St. John’s, Charlottetown, Saint John, Fredericton and Moncton, Montr�al, Ottawa�Gatineau, Toronto and Oshawa, St-Catharines�Niagara, Hamilton, London, Greater Sudbury/Grand Sudbury and Thunder Bay, Regina and Vancouver.

Only two metropolitan areas registered no monthly change while Kitchener (-0.2%) had the sole decrease.