Canada New House Prices Rise 0.2% in May From April

By Robb M. Stewart

OTTAWA--New-house prices in Canada rose for a second straight month in May and saw the broadest advance across the country in almost two years.

Statistics Canada's new-house price index advanced 0.2% from the month before, matching the rise in April. From a year earlier, the index was unchanged last month, the data agency said Thursday.

Canada's housing market has remained relatively muted in recent months, though there are expectations activity could pick up in anticipation the Bank of Canada will continue to cut interest rates as inflation steadily eases. In early June, the Bank of Canada became the first Group of Seven central bank to offer rate relief by cutting its policy rate to 4.75% from 5%, where it had been for almost a year.

Sales of existing homes continued to soften in May, slipping 0.6% from the month before and dropping 5.9% on a year earlier, recent data from the Canadian Real Estate Association showed. At the same time, new residential listings were up 13.5% nationally from last year, and up 0.5% from the prior month when seasonally adjusted.

Statistics Canada said prices in May rose in 10 of the 27 metropolitan areas surveyed by the agency, marking the first month since June 2022 that prices increased in 10 or more areas. Builders surveyed attributed the price gains to construction costs and improved market conditions, the agency 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.

The largest monthly price increases were recorded in the Quebec city of Trois-Rivieres, which ranks as one of Canada's most affordable cities, and in Calgary, Alberta, and on the east coast in Halifax, Nova Scotia.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

06-20-24 0902ET