By Robb M. Stewart
OTTAWA–New-house prices in Canada slipped in September from the month before, the first decrease since November 2019 as higher interest rates dampened demand.
Statistics Canada said Friday its new-house price index fell 0.1% in September from August, with prices down in eight of the metropolitan areas measured, unchanged in 16 and up in three areas. The index logged consecutive 0.1% month-over-month rises in August and July.
From a year earlier, prices rose 6.3% in September, the statistics agency said.
Interest rates have been on the rise this year in the wake of efforts by the Bank of Canada to moderate inflation, with the central bank having raised its main interest rate by 3 percentage points so far this year to its current 3.25%.
According to the Canadian Real Estate Association, the sales-to-new-listings ratio has declined to 54.5% in September from 75.3% in March, suggesting a move to a more balanced housing market from a seller’s market.
Statistics Canada said that some of the builders it surveyed cited lower construction costs as the reason for the price change. Decreased demand for new construction homes in the U.S. helped lower softwood lumber prices in the Canadian market, though prices were higher than year-ago levels, it said.
The new-house price data from Statistics Canada covers single-dwelling, semi-detached and row houses. It doesn’t incorporate prices for newly built condominium units.
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