The latest New Housing Price Index (NHPI) data for April 2024 reveals a slight national increase, with some regions experiencing even brighter outlooks. This report presents an analysis of the latest statistics about regional differences and factors that have influenced these changes, as well as the general economic implications.
National Overview
The NHPI at the national level advanced by 0.2% in April 2024, which is a small increase due to price increases observed in many major urban centers, especially in Alberta and British Columbia. Although the advance was at the national level—new home prices reversed from an annual change posted at this time last year—by the narrowest margin of 0.1% this April 2024. This small fall contrasts against the more substantial year-over-year decline posted in March 2024, where it was down by 0.4%.
Alberta's major cities, Edmonton and Calgary, reported the largest month-over-month increases in new home prices with gains of 1.1% and 0.9% respectively. Alberta's builders blame higher construction costs and favorable market conditions for the gains. Similarly, Alberta is witnessing the fastest pace of population gains in Canada at a rate of 4.4% per annum in the first quarter of 2024, and this has strongly underpinned demand for new housing.
New home prices in Vancouver increased 0.5%, compared with last month and 1.3% higher than the same period last year. Québec followed, with the price increasing 1.2% over one year, as demand has remained strong.
Kitchener–Cambridge–Waterloo and Winnipeg saw the most prominent monthly declines at 0.4%. In the latter market, builders said that poor market conditions were responsible for the lackluster monthly results. Prices dropped most in Ottawa and Saskatoon on a year-on-year basis, by 4.4% and by 2.5%.
Factors Influencing Price Change
Higher Costs of Construction
In areas where the cost of materials or labor is higher, the price of a house is more costly. Increased costs were cited by those builders in the cities with the highest price gains as the largest single factor.
Population
The rise in the number of people in Alberta has positively worked to elevate the demand for housing and most definitely prices. As such, the price of housing is relatively high, especially in towns like Edmonton and Calgary.
Economic Activity
Local economic factors such as employment and consumer confidence are a lot to do with the housing demand and prices. In towns where massive and better job markets are well matched with economic growth, price development level has been on the rise. On the other hand, where it is weaker, there have been price drops.
Year-Over-Year Trends
Nationally, prices for new homes were down 0.1% compared to April 2023; a less significant decline than the decrease of 0.4% observed in March 2024. The largest annual price declines were posted in Ottawa (-4.4%) and Saskatoon (-2.5%), while the most significant increases were recorded in Calgary (+3.9%), Vancouver (+1.3%) and Québec (+1.2%).
Conclusion
The figures for the New Housing Price Index show a mix across Canada's housing market. While monthly changes are marginally positive and yearly changes just a little negative, overall, the trend at the national level shows increasing stability. Alberta is grappling with both strong population growth and increased construction costs, while market conditions are weak in regions like Ottawa and Saskatoon. These trends will be very central to policymakers, builders, home buyers, and investors. Certainly, we shall mark these indicators as we proceed to navigate the changing landscape of Canadian housing prices.
Looking to make your dream home a reality? Coldwell Banker Horizon Realty can help you find the perfect fit in Kelowna. Our experienced real estate professionals possess a deep understanding of local market trends and can guide you through the buying process every step of the way. Contact us today!
Source: Statistics Canada
