The increase in new housing prices in Canada slowed in February, following two consecutive months in which the rate of growth was gaining speed, according to a recent report from
The deceleration continued the downward trend that started in September 2006.
Nationally, contractors' selling prices rose 6.2 per cent between February 2007 and February 2008, a slower pace than the year-over-year increase of 6.5 per cent in January.
The trend was evident in Winnipeg where the price of a new home only rose 0.1 per cent from January to February, which is well below the seven per cent increase in neighbouring Regina and Sasktoon’s 4.3 per cent, and lower than the national rate of 0.3 per cent.
But, Winnipeg new home prices did rise 14.5 per cent from February 2007 to February 2008. Yet, the increase pales when compared to major centres in next-door Saskatchewan.
Nationally, prices rose 0.3 per cent between January and February, resulting in a New Housing Price Index of 158.1 (1997=100). The NHPI for Winnipeg was 172.6 in February.
Regionally, prices again rose at the fastest pace in Saskatoon, which led the nation with an annual price increase of 58.3 per cent, the fastest increase on record for this city. Housing prices rose 4.3 per cent in February compared with a month earlier.
In Regina, the year-over-year increase was 28.6 per cent, up from the annual growth rate of 25.9 per cent recorded in January. Regina's new housing prices jumped seven per cent between January and February. Many builders reported higher prices as a result of increased material costs and a labour shortage that has resulted in higher labour rates.
The markets in both Saskatoon and Regina continue to be strong. Demand for new housing is high in Saskatchewan due to a strong natural resource sector and aggressive efforts to attract migrants to alleviate the labour shortage in the province.
In Edmonton, the 12-month growth rate slowed in February to 14.8 per cent, the seventh month in a row in which the pace of growth has decelerated.
In Calgary, prices rose 5.2 per cent between February 2007 and February 2008, slightly slower than the 5.6 per cent year-over-year increase in the previous month.
Edmonton and Calgary are experiencing slower market conditions. With some migrants leaving the province, there are many resale houses on the market, making for slower new housing sales. This has resulted in both cities showing price declines on a monthly basis. In Edmonton, prices were down 0.9 per cent from January, and in Calgary, they were down 0.3 per cent.