Canadian new home prices are dropping for the first time in nearly a decade. The Statistics Canada (StatCan) New Home Price Index (NHPI) shows prices dropping for a third consecutive month in July. The national decline in new home prices in 2019 is the first since the Great Recession.
Canadian New Home Prices Fall For A Third Straight Month
New home prices are falling across Canada for the first-time in years. The National NHPI fell 0.1% in July, when compared to a month before. This represents a 0.39% decline compared to the same month last year. Not a huge decline, but also remember these numbers are adjusted for inflation as well.
Canadian New Home Price Index (NHPI)
Statistics Canada’s index for new home prices across Canada.
Source: StatCan, Better Dwelling.
The index rate of price growth is trending lower, reaching the lowest point in years. The National NHPI showed a third consecutive month of deceleration. June was the first month it reached a negative annual growth rate. The decline is still only 0.39%, but it is the largest since 2009. The size of the decline is less of a takeaway than the fact prices are trending lower.
Canadian New Home Price Index (NHPI) Change
The 12-month percent change on Statistics Canada’s index for new home prices across Canada.
Source: StatCan, Better Dwelling.
Montreal, Ottawa Real Estate See Biggest New Home Price Gains
Eastern Canada is home to the largest price increases. Montreal made the biggest monthly NHPI increase at 1.6% in July. Ottawa followed with an increase of 0.9%, when compared to the month before. The aggregate area of St. John, Fredricton, and Moncton made the third biggest increase with 0.7%. Home prices in these markets have been left behind in recent years, so they appear to be playing catch up.
Canadian New Home Price Index (NHPI) By Market
The one month percent change in new home prices by market.
Source: StatCan, Better Dwelling.
Edmonton, Toronto, Vancouver Real Estate Makes Biggest Drop
The biggest drops for the month were in Edmonton, Toronto, and Vancouver. Edmonton’s NHPI made the biggest drop at a 0.8% decline in July, when compared to a month before. Toronto followed with a decline of 0.6% from the month before. Vancouver came in third with a 0.5% decline over the same period. Vancouver’s drop is the largest in nearly a decade. Yes, two of the biggest declines in prices were in the largest new home markets in the country.
Canadian New Home Price Index (NHPI) By Market
The 12-month percent change in new home prices by market.
Source: StatCan, Better Dwelling.
Canadian new home prices made a small decline, after months of stalling at inflation. Most of the weakness in Western Canada, which has seen a rapid cooling after years of leading the country.
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I wonder what the reasoning is? Cheaper plots of land? Lower construction costs? Demand? ect.
Real mixed bag of sentiment in my north 905 neighbourhood. The endless stream of tradesmen seem to be back upgrading interiors, replacing windows, roofs, driveways. Things were quiet for a good 18 months. Now its upgrade, upgrade, upgrade.
Lots of chatter about when folks are going to list their home in 2020…mainly upsizers or folks retiring to small communities elsewhere in Ontario where your buck goes further. A massive new subdivision sales office at the corner of Yonge and St John’s Sideroad is opening after a long pause.
At the same time, longtime listings are still not moving, some more than 12 months now, some have changed sale signs to “for lease”, there are a few new stupid price listings, but detached stuff priced right will sell in less than a week, so there are buyers among the crickets. Nice to see I guess.
Look at that chart! Steadily up since the start. Buy and hold peeps!
Womp womp. BD4L.
To come back to reality/affordability in places like Toronto we need to implement a predatory real estate tax where all none primary residential units are taxed at 3-5% home value each year. We need to force real estate hoarders to sell their predatory real estate.
We need a eurodollar squeeze that will trigger an easier to comprehend issue like a massive bond fund liquidity mismatch or the slaughtering of euro and asian demand…oh wait. BD4L.
Doesn’t this mean condo prices are the last floor still holding the market?
A one month change doesn’t mean anything. Windsor home prices usually fall slightly at the end of the summer…and they are up double digits year over year!