New home prices were up 1.4% across Canada in May, with 19 of the 27 census metropolitan areas noting some form of increase.
The largest monthly increase was reported in Winnipeg, where prices for new homes jumped 5.1% as demand continued to exceed supply. Similarly, Calgary new home prices rose 3.7% month-over-month, marking the sharpest increase since July 2006. However, the increase was largely attributed to the sale of homes above the $600,000 price range, which accounted for nearly 26% of all new homes sold in May.
The overall increase in the price of a new home was due to surging construction costs. Western Canada, in particular, has been significantly impacted by a shortage of building materials amid ongoing supply chain issues at steel and lumber mills, coupled with surging transportation costs.
With respect to year-ago levels, new home prices were up 11.3% in May — the largest increase since November 2006. Likewise, all 27 of Canada’s housing markets noted year-over-year price gains, with prices surging by the most on record in the Kitchener-Cambridge-Waterloo, Ottawa, and Windsor regions.
Information for this briefing was found via Statistics Canada, Bloomberg, and the BoC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
