New Home Prices Fall Across Canada For The First Time Since The Great Recession

New home prices are dropping across Canada, according to the national statistics agency. The Statistics Canada (Stat Can) New Home Price Index (NHPI) shows a price decline for this past January. The decline is the first negative print for the index since the Great Recession.

New Home Price Index (NHPI)

The NHPI is a home price index, not unlike the CREA benchmark or TNB HPI, but for new construction. The index covers a contractor’s selling price for single, semi-detached, and town homes. It’s used by academics and economists to study trends in new construction pricing. There is a big note to keep in mind when looking at these numbers.

Only the developer’s best selling homes are included in the numbers. More specifically, the questionnaire covers the best selling units previously identified by the developer. That means it’s not a comprehensive price index for new homes, like those published by Altus or MLA Canada. Instead, they use just the best selling units, which gives up a positive price bias. Keeping that in mind, here’s the numbers.

New Home Prices Make First Annual Price Decline In A Decade

New home prices across Canada are dropping for the first time in a decade. StatCan’s index shows prices declined 0.1% in January, from a month before. Prices are also down 0.1% when compared to the same time last year. It’s a very small decline, but notable since it’s the first one since 2009.

Canadian New Home Annual Price Change

The annual percent change of home prices across Canada.

Source: Statistics Canada, Better Dwelling.

The growth trend has been decelerating for over a year. Since peaking in September 2017, annual price growth dropped until November 2018. From there it stalled until the end of December, before taking the plunge into the red in January. Historically this has occurred before or during a recession. There is one exception, from 1994 to 1997.

Toronto New Home Prices Make Biggest Drop Since 1996

New home prices in the City of Toronto are falling. The price of a new home fell 0.19% in January, when compared to the month before. Prices were also down 1.53% from the same month last year. Once again, the declines aren’t large but notable because it’s the first since

Toronto New Home Annual Price Change

The annual percent change of home prices in Toronto.

Source: Statistics Canada, Better Dwelling.

The trend is lower for new home prices in Greater Toronto. There’s some stalling on the lower end, but prices are now 1.62% lower than they were at peak in December 2017. Also notable is the peak was literally the month before new mortgage rules came into effect.

Vancouver New Home Prices Enter Second Month of Declines

Vancouver new home prices are falling. The price of a new home fell 0.1% in January, when compared to a month before. This represents a decline of 0.28%, when compared to the same month last year. Not huge, but also still underperforming the national average for home prices.

Vancouver New Home Annual Price Change

The annual percent change of home prices in Vancouver.

Source: Statistics Canada, Better Dwelling.

The annual pace of growth is continuing the trend of heading lower. Peak growth hit in February 2018, and is now printing the 11th consecutive month of deceleration. Prices are now 0.45% lower than the peak in October 2018. December 2018 was the first month with a negative print since 2015.

In my opinion, the NHPI isn’t a great index for price changes, since there’s such a heavy bias. However, it is useful for gauging sentiment for the best selling units. Changes in the index mostly correlate with general economic weakness starting to appear.

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  • Marco 5 years ago

    Why does the chart not go up to February 2019 and ends in September 2018? Can you update this?

    • Luigi Vampa 5 years ago

      The last datapoint is actually Jan 2019… hover over the plot with your mouse.

  • ken 5 years ago

    Prices in Vancouver have fallen WAAAY more than that chart shows.

  • Bob Emery 5 years ago

    This article is strange and wrong. As I believe you are all aware, Toronto is a World Class City. In fact, that feels so good to say that I will say it again. Toronto is a World Class City! Toronto is a World Class City!

    That felt good. Now, being a world class city means that the whole world wants to live in it. But, as you may be aware, the world is larger than Toronto. This means that it is impossible for all of the world population to have a home in Toronto, like they desire. This is simple physics.

    In addition, new single family homes are the best homes, placing even more buying pressure on them.

    All together, this means that the article is actually a lie. Prices cannot go down. This is science and facts, people.


    • M.Bury 5 years ago

      Your conclusion is right, but for the wrong reason:
      Don’t you know Toronto (THE World Class City) is exempt from simple physics? Quantum Mechanics shows us that all the world can indeed have a home in Toronto and that’s why prices will never go down. Also, there is Prop Tech, most of the world’s immigration and an Uber.

      /more sarcasm

      • Greg Gerner 5 years ago

        Emery and Bury, I’m absolutely loving it. You two are crushing it, and I am LMAO. “It’s gold, Jerry, GOLD.” You two should take this on the road. I’m seeing it now: “Emery & Bury”; or, if you prefer, “Bury & Emery.”

        PS: I’m proud, too, because while I am but an ‘umble Amurkan, my wife is a native of THE World Class City(TM), by right of which I may bask in reflected glory.

      • SUMSKILLZ 5 years ago

        Gravity of Toronto is so strong money can’t escape.

  • DB 5 years ago

    Thee Bob Emery….I thought you were still in Fairbanks Alaska doing stand up there. Oh right its not February anymore. Why would you think that joke would work here.

  • Jupiter 5 years ago

    In encourage everyone to calculate average land per person in GTA. then use that to estimate average available residential area per family. you will find per family we have around 30,000 – 60,000 square feet per 4 person family. that’s 10x the amount of residential area to give everyone a 3,000 square foot home.

  • Bumblebee 5 years ago

    Home prices are so high for median income of $80000 even with low interest rates. We reached the peak of prices in 2017. There is no room for any further increase.
    We are in recession, the yield curve inverted. The US will enter recession soon. Unemployment will increase, household debt will become unsustainable.
    Canada will ban Huawei. China will ban investment in Canada.
    In the next months, prices will drop 30%, that will make homes more affordable, new immigrants will start purchasing, that will boost the economy, then we will have a recovery.

    • Oakville Rob 5 years ago

      According to the last census the median *household income in Canada is $70,336. In Toronto it’s $65,829.

      • Paul 5 years ago


        And the stats suggest that over 80% is devoted to carrying costs of their home. This is an entire generation that isn’t saving money. The amount of money they owe in debt used to be the amount we had saved or in equity.

        • Oakville Rob 5 years ago

          It’s unsustainable. The housing bubble has been funded with monopoly money, not peoples income or their ability to repay. The money was never real unless you cashed out.

          I think it was Rothschild who said that many fortunes have been made close to the top of a market peak (either side of the peak, it’s about proximity to the top)…

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