According to the Statistics Canada ‘New Housing Price Index, October 2021’, new home prices increased 0.9% in October nationally, slightly higher than the rise observed over the past four months. Prices were up in 15 of the 27 census metropolitan areas surveyed, unchanged in 10, and declined in 2.
Shortage of housing supply pushes up new home prices in some regions
Kitchener–Cambridge–Waterloo (+3.8%) reported the largest monthly increase in October for new home prices, followed by London (+2.4%). According to the Kitchener Waterloo Association of Realtors, the Multiple Listing Service benchmark price for all residential properties was $803,900, an increase of 2.5% compared with September. The London St. Thomas Association of Realtors reported that benchmark prices increased by 2.9% in London for all residential properties, reaching $613,900. Given the proximity of the two cities to Toronto, demand for homes has also been coming from buyers outside the London and Kitchener–Cambridge–Waterloo region, driving home prices further up in a market with persisting low supply, and creating a barrier for some local buyers.
New home prices also increased in Victoria (+3.3%), its largest increase since May 2002. Similarly to many regional housing markets in Canada, active listings are depleting in Victoria due to sustained demand. In October, 1,036 homes were listed for sale, as reported by the Victoria Real Estate Board, 7.8% less than in September and one third of the 10-year average. If competition for homes continues in Victoria, upward price pressure should persist given the historically low supply.
New homes prices continue to rise on an annual basis
Nationally, new home prices rose 11.5% year over year in October, experiencing growth rates not seen since 2006.
New home prices were up in all 27 markets on an annual basis, with the largest gains in Kitchener–Cambridge–Waterloo (+29.2%), which has been recording unprecedented annual increases since April 2021. New home prices also increased for Ottawa (+24.8%) and Windsor (+21.9%), with Ottawa showing some signs of slowing in its annual price growth.
