By Kim Mackrael
OTTAWA–Canadian new house prices rose in May amid rising construction costs linked to some building material shortages.
New house prices in Canada increased 1.4% in May, Statistics Canada said Friday. From a year ago, new house prices advanced 11.3%, the largest increase in more than 14 years.
Earlier in the week, the Canadian Real Estate Association said home-sale activity fell for a second consecutive month in May, but remained at historically elevated levels. House prices for existing homes, meanwhile, rose at a record pace from a year ago.
Canada’s housing markets have surged during the past year as many people who were stuck at home due to pandemic-related business and school closures sought larger houses, often outside the country’s largest cities. Bank of Canada Governor Tiff Macklem said this week there are early signs the housing market is now slowing, and the central bank anticipates a better balance in supply and demand over time.
According to Statistics Canada, 19 of the 27 metropolitan areas tracked posted increases in new house prices in May. The biggest price gains were in the cities of Winnipeg and Calgary. Meanwhile, price growth was slower in Canada’s biggest housing markets, in Toronto, Vancouver and Montreal.
The data agency said builders reported that rising construction costs were helping to fuel higher new home prices across the country, with Western Canada hit especially hard by shortages of building materials such as lumber and steel.
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