Newly built home prices start to decline

The price of a new home in Canada edged down in July for the first time in more than a year and fewer were built in August, evidence that a real estate slowdown seen this summer in the resale market is beginning to bleed into the new home sector.

Statistics Canada reported Thursday that its new housing price index fell for the first time in 13 months, declining 0.1 per cent in July from its level in June. That reversed what was seen between May and June, when new house prices rose 0.1 per cent.

Reinforcing that trend, the annualized rate of housing starts dropped three per cent in August compared to July, according to the Canada Mortgage and Housing Corp., to 183,300 from 188,900. Both single and multiple-dwelling starts dropped during the month.

And Canadians should expect further signs of cooling across Canada's housing market, said Bank of Montreal economist Benjamin Reitzes.

“That would be the slowest pace of homebuilding so far this year, though in line with long-run household formation,” Reitzes wrote.


Source: Globe & Mail
Toronto — The Canadian Press
Published on Thursday, Sep. 09, 2010 10:10AM EDT
Last updated on Thursday, Sep. 09, 2010 2:27PM EDT

Click here to read the entire article...