New-house prices in Canada have seen a slight increase for the second consecutive month in June, signaling a rebound in the housing market. According to Statistics Canada, the new-house price index rose by 0.1% compared to the previous month, mirroring a similar increase in May, which marked the first upward movement in prices since August of the prior year.
The growth in prices was mainly driven by Vancouver and Calgary, two of the country’s larger housing markets. However, prices in June still remained 0.7% lower compared to the same period last year.
Over the past few months, Canada’s housing market has experienced a recovery from a period of weakness that began early last year. This weakness was primarily due to the Bank of Canada’s aggressive interest rate hikes aimed at curbing inflation. In June, after a brief pause, the central bank raised its benchmark policy rate by a quarter-point to a fresh 22-year high, as it projected that achieving its 2% inflation target would take longer than anticipated, largely due to strong consumer spending.
In addition to the increase in new-house prices, sales of existing homes also saw a rise in June, climbing by 1.5% compared to the previous month. Data released by the Canadian Real Estate Association revealed that the average national home price increased by 6.7% from the same period last year.
Statistics Canada reported that out of the 27 metropolitan areas surveyed, prices for new houses increased in four, decreased in nine, and remained unchanged in the remaining areas.
It is important to note that the new-house price data from Statistics Canada only includes single-dwelling, semi-detached, and row houses, and does not incorporate prices for newly built condominium units.
