According to Statistics Canada, the growth in new home prices slowed for a second month in a row, rising by 0.6 percent in June, the smallest increase in six months.
Calgary (+3.5 percent) reported the largest monthly increase in new home prices in June. Employment gains may have driven up the demand for housing, by allowing more people to enter the market. There were 59,100 more people working in Calgary in June compared with the same month a year earlier. Although employment in Alberta has not yet returned to pre-pandemic levels, there is evidence of recovery as most industries, including mining, quarrying, and oil and gas, employed more people in June 2021 than in June of last year.
New house prices also increased in Guelph and Saskatoon (both up 2.2 percent). According to the Canadian Real Estate Association, on a year-over-year basis, new and resale home sales in Guelph were 13.9 percent above the five-year average in June. New listings also trended upward (0.9 percent above the five-year average), but not enough to keep pace with demand, which continued to contribute to the price increases. Saskatoon also experienced a rise in home sales (+15.9 percent) in June compared with the same month a year ago. Inventory remained tight in both census metropolitan areas (CMAs).
Among the 27 CMAs surveyed, Vancouver (-0.3 percent) recorded the only decline in new home prices in June. The benchmark price for all residential properties in the Greater Vancouver Area rose 0.2 percent, a deceleration from the 1.5 percent increase in May and the third consecutive deceleration.
Although the Canadian housing market remains near record-high sales levels, signs of moderation have begun to appear over the past few months. June (-0.7 percent) marked the third consecutive decrease in new listings nationally, with declines in half of all local markets. Sales activity was also down in 92 percent of all local markets on a month-over-month basis, according to the Canadian Real Estate Association. Further decreases in home prices may be observed in the fall if the number of sales continues to decrease faster than available listings.
The current market slowdown, partly due to buyer fatigue, has started to manifest in the housing market, with fewer buyers ready to engage in bidding wars. As well, the desire to buy a home could start subsiding as pandemic measures are lifted and many workers return to offices.
Despite the month-over-month deceleration in new house price increases, year-over-year gains remained near record highs (+11.9 percent) in June.
New home prices were up in all 27 CMAs on an annual basis, with the largest increases in Kitchener–Cambridge–Waterloo (+27.7 percent), Ottawa (+26.2 percent), Windsor (+22.8 percent) and Montréal (+19.9 percent). These are the largest annual accelerations for these four CMAs since the beginning of the New Housing Price Index in February 1981.