{"id":20008,"date":"2022-06-08T10:10:00","date_gmt":"2022-06-08T17:10:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=20008"},"modified":"2022-06-07T14:36:22","modified_gmt":"2022-06-07T21:36:22","slug":"the-rise-in-construction-activity-had-impacts-on-costs-new-home-price-growth-showed-signs-of-cooling","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/06\/the-rise-in-construction-activity-had-impacts-on-costs-new-home-price-growth-showed-signs-of-cooling\/","title":{"rendered":"The Rise in Construction Activity Had Impacts on Costs, New Home Price Growth Showed Signs of Cooling"},"content":{"rendered":"<p style=\"text-align: justify;\">The price of a new home in Canada rose again in April, but to a lesser extent compared to previous months.<\/p>\n<p style=\"text-align: justify;\">Last month, new home prices \u201cshowed some signs of cooling,\u201d as they increased 0.3% month-over-month according to the April New Housing Price Index (NHPI) published by Statistics Canada. This is a slowdown from the average increase of 1.1% that was recorded during the first three months of 2022.<\/p>\n<p style=\"text-align: justify;\">On a yearly basis, new home prices increased 9.4% in April, the smallest growth rate since March 2021.<\/p>\n<p style=\"text-align: justify;\">The NHPI monitors changes in selling prices for new residential homes over time, and is applicable to new single-family homes, semi-detached residences and townhomes in Canada.<\/p>\n<p style=\"text-align: justify;\"><strong>New home prices rise in most metro areas<\/strong><\/p>\n<p style=\"text-align: justify;\">Prices in 10 of the 27 census metropolitan areas (CMAs) included in the NHPI grew in April, while new home values dropped in one CMA and remained unchanged in the others.<\/p>\n<p style=\"text-align: justify;\">Regina reported the most growth in new home prices last month, where values rose 1.7% in April. Compared to Q1-2020, the number of homes under construction in Saskatchewan has grown 46.6% in Q1-2022. Meanwhile, employment in the construction industry has risen 8.7% over the same period.<\/p>\n<p style=\"text-align: justify;\">\u201cThis level of growth in activity led to labour and material shortages, creating an upward pressure on construction costs within this province,\u201d the report said.<\/p>\n<p style=\"text-align: justify;\">Ranking behind Regina, Calgary had the second-highest new home price appreciation in April as prices rose 1.6% month-to-month. This trend was spurred by continuously tight inventory in the resale market, which has had less than two months of inventory since November 2021, according to the NHPI.<\/p>\n<p style=\"text-align: justify;\">In Canada\u2019s other large cities, new home prices jumped in Ottawa\u2013Gatineau, Edmonton and Vancouver by 1.5%, 0.5% and 0.2% from March to April. New home prices in Toronto stayed the same month-to-month, and dropped 0.4% in Montr\u00e9al.<\/p>\n<p style=\"text-align: justify;\">Between 2021 and 2022, Winnipeg reported the highest year-over-year increase in new home prices during April, which grew 21.9% annually. This was followed by Calgary and Kitchener\u2013Cambridge\u2013Waterloo, where prices jumped 21.7% and 19% over the time period.<\/p>\n<p style=\"text-align: justify;\"><strong>Higher construction activity equals growing costs<\/strong><\/p>\n<p style=\"text-align: justify;\">With more homes being built across the country, the cost to build is also rising in tandem.<\/p>\n<p style=\"text-align: justify;\">According to data from the Canada Mortgage and Housing Corporation (CMHC), the quantity of houses under construction increased 24% between Q1-2020 and Q1-2022. In Q4-2021 and Q1-2022 particularly, there was the highest levels of residential construction activity on record.<\/p>\n<p style=\"text-align: justify;\">\u201cThis rise in construction activity had impacts on construction costs, pushing up the prices of new homes,\u201d explained the NHPI report.<\/p>\n<p style=\"text-align: justify;\">Building Construction Price Index shows that softwood lumber and labour shortages were key drivers of rising construction costs during Q1-2022.<\/p>\n<p style=\"text-align: justify;\">\u201cThis was also echoed by many of the builders surveyed, who listed construction costs as the factor that was most frequently behind the latest price increase for new homes,\u201d said the report.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2022\/05\/new-home-price-cools-april.html\" target=\"_blank\" rel=\"noopener\">New Home Price Growth Cools in April as Residential Construction Activity Stays High<\/a> by Michelle McNally | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The price of a new home in Canada rose again in April, but to a lesser extent compared to previous months. Last month, new home prices \u201cshowed some signs of &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/06\/the-rise-in-construction-activity-had-impacts-on-costs-new-home-price-growth-showed-signs-of-cooling\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-20008","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Rise in Construction Activity Had Impacts on Costs, New Home Price Growth Showed Signs of Cooling &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/06\/the-rise-in-construction-activity-had-impacts-on-costs-new-home-price-growth-showed-signs-of-cooling\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"The Rise in Construction Activity Had Impacts on Costs, New Home Price Growth Showed Signs of Cooling &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The price of a new home in Canada rose again in April, but to a lesser extent compared to previous months. 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