New house prices continued to increase in the majority of housing markets across the country in October, according to Statistics Canada.
The federal agency reported Friday that prices nationally for new homes rose 0.8 per cent in October following a 1.2% acceleration in September, with prices up in 21 of the 27 census metropolitan areas surveyed. On an annual basis, prices were up 3.9 per cent.
“The global pandemic has affected the housing markets in many ways. For example, borrowing rates have fallen to historic lows and buyer demand has shifted towards larger homes. There has also been increased demand for homes in cities surrounding larger urban centres such as Toronto, Vancouver and Montréal. All of these factors have contributed to higher new home prices across Canada,” it said.
“New home prices have risen 3.1% nationally since the beginning of the pandemic in March. In comparison, new home prices edged up 0.1% from March to October last year.”
In the Calgary region, prices rose by 0.4 per cent in October but they were flat compared with a year ago. In the Edmonton region, month-over-month prices were up 0.3 per cent but they too were flat from last year.
Prices in Calgary and Edmonton rose for the second consecutive month.
“Nationally, the new housing market remained strong. Fewer (-20.5 per cent ) completed new single family (single, semi-detached and row) homes were available for sale in October compared with the same month in 2019, as reported by the Canada Mortgage and Housing Corporation,” said StatsCan.
Nationally, the yearly increase was the largest since June 2017.
The federal agency said the outlook for the new housing market is to remain strong in the near term.
“The Bank of Canada recently committed to maintaining the overnight rate at 0.25 per cent until inflation reaches the targeted 2.0 per cent rate. The inflation rate in October was up 0.7 per cent as reported by the Consumer Price Index. The Bank’s current projection for achieving a 2.0 per cent inflation rate indicates that this will most likely not occur until 2023, hence borrowing costs could remain at historically low levels. We anticipate that low borrowing rates, coupled with increased demand for single family homes from homebuyers seeking more living space, will continue to apply upward pressure on new home prices in the near term.”