OTTAWA – Today, a Statistics Canada report said new home prices in Canada (composite of 27 census metropolitan areas) grew at their slowest pace since December 2020.
Nationally, new home prices were up 0.4% in July. Prices in Toronto (+0.2%) and Vancouver (+0.3%), Canada’s most expensive cities, grew at a slower pace than the national average.
Prices were up in 19 of the census metropolitan areas (CMAs) surveyed, led by Oshawa (+4.3%). Oshawa enjoys proximity to the neighbouring Toronto region, and thus has seen new home prices rise on account of telework and a need for larger homes, and because it is a cheaper alternative for those who commute to Toronto. The Durham Region Association of Realtors reported that all home types listed in Oshawa took an average of only 11 days to sell.
One of the more affordable areas in Ontario, Greater Sudbury, saw new home prices rise 1.9% in July. Continuing low supply contributed to the price increase. Inventory levels were down to 1.1 months, below their historical average of 5.1 months, while active listings were down to 319 units, the lowest number in more than thirty years for the month of July according to the Canadian Real Estate Association.
New Housing Price Index, 12-month change
Nationally, new home prices were up 11.9% year over year in July, with the house structure (+14.1%) rising more than the land (+6.7%). According to the Building Construction Price Index, construction prices were up year over year by almost a quarter for single-detached houses (+23.9%) and townhouses (+24.4%) in the second quarter of 2021.
New home prices were up in all of the CMAs surveyed across the country, with the largest increases in Kitchener–Cambridge–Waterloo (+27.7%) and Ottawa (+25.3%). Housing demand has been strong in Kitchener–Cambridge–Waterloo due to the desire for larger homes as well as interest from Toronto buyers on account of relatively cheaper homes.
The price increase in Ottawa may be attributable to its large share of federal government and high-tech workers who have adapted to working from home during the COVID-19 pandemic and may be seeking larger homes to accommodate home offices. Many Ottawa builders have been selling homes with different arrangements, such as a den or a guest suite to allow for multi-generational living or a rental income.
Courtesy of Statistics Canada.