Nov 9, 2010, Calgary, Montreal contribute to new home price rise

Montreal and Calgary were the largest contributors to the increase in the New Housing Price Index between August and September.

Statistics Canada reported today that nationally the index rose by 0.2 per cent in September on a monthly basis buoyed by Montreal’s 1.6 per cent hike and Calgary’s 0.3 per cent rise.

“The monthly increases in these two metropolitan areas were due in part to builders moving to new areas with higher land development fees,” said the federal agency.

In September, prices remained unchanged in eight of 21 metropolitan areas in Canada.

Prices declined by 0.4 per cent in both Vancouver and Victoria and edged down 0.1 per cent in Hamilton.

Year over year, the NHPI was up 2.7 per cent in September. In Calgary, it rose by 2.1 per cent.

The largest year-over-year increase was recorded in Regina (6.1 per cent), followed by Winnipeg (5.2 per cent) and St. John’s (4.9 per cent).

Of the 21 metropolitan areas surveyed, four registered 12-month declines in September: Charlottetown (2.2 per cent) followed by Greater Sudbury and Thunder Bay (1.2 per cent), Victoria (0.6 per cent) and Windsor (0.5 per cent).

David Hooge, president of the Canadian Home Builders’ Association-Calgary Region, said the local industry has not seen a lot of cost adjustments in the downward direction.

“Part of the reason for that is the lag from sales to start. That lag is even that much bigger for trades and suppliers being that we saw a fairly decent start to the year and finish to last year. The trades and suppliers are busy,” said Hooge.

“So in terms of decreases in costs they need to see the slowdown themselves and they’re starting to see that. But we haven’t seen decreases for sure in costs. In some cases, there have been some increases. Not significant.”

As for house prices, Hooge said prices in the resale market have come down a little bit and there has been some “easing” in new home prices because sales have been slower “for longer than we’d like.”

“There’s some more aggressive pricing out there right now. That will probably continue through the end of the year as people look to move product out by the end of the year,” he said.

Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said the overall pressure on new home prices is expected to remain “relatively modest” with fewer units being started and with the number of units under construction decreasing.

By Mario Toneguzzi, Calgary Herald