Blog by Mark Longpre

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Housing prices rise less than expected

OTTAWA — Canadian housing prices rose 0.1 per cent in August, less than analysts expected, following a 0.3 per cent advance in July, according to Statistics Canada data released Tuesday.


Analysts had been calling for a gain of 0.2 per cent.


"Overall, the report suggests that despite the rebound in the Canadian housing market and the dramatic turnaround in existing home prices in recent months, new home prices remain fairly weak," said TD Securities economics strategist Millan Mulraine.


Between July and August, prices increased the most in St. John's (up 1.1 per cent) followed by Quebec (up 0.9 per cent) and Regina (up 0.8 per cent.)


In Quebec, the agency said prices continued to increase as builders reported higher material and labour costs.


Builders moving to new phases of development also raised their prices as the scarcity of available lots has been pushing up land value in this region, it said.


The largest monthly decrease in new housing prices was recorded in Hamilton, Ont., ( down 0.5 per cent.) Monthly declines were also observed in Windsor, Ont., (down 0.4 per cent) and Edmonton (down 0.3 per cent.)


Year over year, the new housing price Index was down 3.1 per cent. The largest declines remained in Western Canada, where prices decreased from highs registered in late 2007 and the beginning of 2008.


In the Prairie region, 12-month declines were recorded in Edmonton (down 11.4 per cent), Saskatoon ( down 7.6 per cent) and Calgary (down 6.3 per cent.)


For the 10th consecutive month, the largest year-over-year increase was registered in St. John's (up 7.5 per cent.)