In The News: Canada new home prices beat estimates in May

Canada new home prices beat estimates in May

Financial Post  Jul 7, 2011

OTTAWA — New home prices rose 0.4% in May, following a 0.3% gain in the previous month, Statistics Canada said Thursday.

Economists had expected prices to rise by 0.2% for the month.

The federal agency said the biggest month-over-month increase were in Regina, up 1.7 %, the Kitchener–Cambridge–Waterloo region of Ontario, up one per cent, and Toronto-Oshawa, up 0.9%.

Prices were unchanged in seven of the 21 metropolitan regions surveyed by the agency.
Year over year, prices were up 1.9% in May, matching the increase in April. Statistics Canada index does not provide actual values for homes.

“While we have witnessed steady growth in this index in recent months, we are expecting a softening going forward . . . ,” said Karen Cordes Woods, at Scotia Capital.

Meanwhile, in a separate report Thursday, realtor Royal LePage said its survey of house prices showed a “sizable year-over-year price increases in the second quarter of 2011, but high house prices are concealing early signs of a moderating market.”

“The market has seen its near-term peak in house price appreciation, and a slower second half of the year is expected. Still, by the end of 2011, the national average house price is expected to be 7.7% higher than it was at the end of 2010,” it said.

The average house price in Canada rose 7.5% in the second quarter from a year earlier to $356,625 for a detached bungalow. The price for a standard two-storey home increased 6.1% to $390,163, while the price for a standard condominium was up 3.5% to $238,064.

On Wednesday, Statistics Canada reported that residential building permits continued to trail non-residential activity, especially in the commercial sector.

Non-residential permits rose by 50.9% to $2.7-billion, following two straight monthly declines, with most of the activity focused on commercial developments in Quebec, Alberta and Ontario, the agency said.

The residential sector increased just 5.3% to $3.7-billion, but still better that the 12.1% drop in April. Multi-family unit intentions in Quebec and Ontario accounted for much of the gain, Statistics Canada said.

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