According to the most recent New Home Price Index released by Statistics Canada, new home prices reached record heights in January, but the pace of growth has slowed substantially- suggesting that perhaps the market is beginning to cool.
Led by growth in Oshawa, Toronto and Montreal, modestly outperforming analysts’ predictions, the index grew by 0.2% in January, building on growth of 0.1% in December.
Moving from December to January, prices increased most significantly in Winnipeg : 0.7%, Quebec: 0.5% and Toronto and Oshawa, and Montreal– all increasing by 0.4%
These increases attributed to builders introducing new list prices (Winnipeg), improving general market conditions (Toronto and Oshawa), and higher material costs (Montreal and Quebec).
Decreases were “seen in the Saint John, Fredericton and Moncton metropolitan regions aggregation, as well as in Hamilton (both down 0.2%) and Edmonton (-0.1%).”
Year over year, the New Home Price Index rose up 1.9% in January on the heels of a 2.1% increase in December.
The latest index seems to underscore analyst sentiment, that states that the surging short term price gains of years past have been brought to more sustainable levels- as rising interest rates, and increases to lending restrictions begin to have material impact on the market, bringing a sense of balance between growth in price, and growth in the market itself.
How does that break down to local markets activity? Speaking exclusively to Propertywire.ca, Toronto Realtor Steven Fudge, Sales Rep, Bosley R.E. Ltd., Brokerage (www.urbaneer.com), feels that, recently, there may be decrease in numbers overall, but that business remains steady; "Investors expanding their portfolios with 'long-term hold' properties remain active in the downtown Toronto market, while speculators who were flipping condos have retracted. We're seeing fewer buyers but those buyers still have deep pockets"