Canada's average new home prices saw their first monthly decline in nearly three years
The average new home price across Canada saw its first monthly drop since November 2019, with a 0.1% decline in September that stemmed from higher interest rates and decreasing construction costs, according to the national statistics agency.
The rate hikes “helped curb the demand on housing, which was an intended consequence of the Bank of Canada trying to moderate the inflation rate,” Statistics Canada said in a new report.
Annual price growth also moderated for the sixth consecutive month, with a 6.3% year over year increase in September.
Citing figures from the Canadian Real Estate Association (CREA), StatCan said that the sales-to-new-listings ratio nationwide dropped from 75.3% in March to 54.5% in September, “indicating a move from a seller’s market to a more balanced one.”
A major driver of reduced construction costs was the lower demand for newly built homes in the United States, which applied downward pressure on Canada’s softwood lumber prices.
“This combination of lower demand for housing, lower construction costs, and uncertainty regarding future interest rates contributed to the small decline in new home prices at the national level,” StatCan reported.