The price of new homes across the country remained virtually unchanged for the second month in a row, new data from Statistics Canada reveals.
In August, the price of new homes edged up just 0.1% -- the same change as was seen in July. Even when looking at each of the 27 metropolitan areas surveyed by Statistics Canada for their report, none saw large changes from the previous month. In fact, just four of the areas experienced increases, all of which were less than 1%. Meanwhile, the Ontario portion of Ottawa–Gatineau was the only area to see a decrease, falling a negligible -0.1%. Prices in the remaining 22 areas were unchanged.
Unlike the resale market where higher interest rates have slowed demand and put downward pressure on prices, the Statistics Canada report notes that higher construction costs have left new home developers with less flexibility to shift with the market. It points to a recent report from the Canadian Home Builders' Association that stated 93% of builders have indicated that lumber prices are a continued issue contributing to the increased prices of new homes.
Out of all the cities analyzed, Saskatoon saw the largest increase in new home prices in August, rising 0.9%. The report attributes this largely to increased demand from new international residents. In fact, during the first quarter of 2022 alone, Saskatchewan's population grew by 2,397.
"According to the Saskatchewan Realtors Association, inventory levels for homes were below Saskatoon's average, especially for homes priced under $500,000, and overall inventory levels were 20% lower than in August 2021," the report reads. "The shortage of supply for more affordable homes contributed to the rise in prices of new homes in August."
Despite this, Saskatchewan still has extremely affordable home prices compared to other metropolitan areas, with the benchmark price sitting at $383,300 in August.
Although new home prices across Canada appear to have largely stagnated, they're still up compared to the same time last year. The gap, however, is narrowing. In August of this year, new home prices sat 6.9% above August 2022 prices -- the smallest annual increase seen since January 2021.
On a municipal level, there are some notable exceptions to this trend. Calgary, for instance, recorded its largest year-over-year increase in new home prices in August of 14.9%. Winnipeg also had a sizeable 13.4% annual jump, followed closely by Kitchener-Cambridge-Waterloo with an 11.9% increase.