New House Prices Remain Flat due to Higher Interest, and Tougher Mortgage Regulations

Canadian new home prices remained flat for the second month in a row in April as higher interest rates and tougher mortgage regulations dampened buyer enthusiasm, Statistics Canada said on Thursday.

Analysts in a Reuters poll predicted no change from March. Prices in Toronto fell 0.5 per cent, the fourth monthly decrease in a row, after the provincial government had instituted measures last year to rein in the city’s hot market.

New home prices in Toronto, Canada’s biggest city, fell 0.3 per cent from April, 2017, the first year-over-year decrease since October, 2009. Overall, prices rose in eight cities in March, while in 19 cities, prices were flat or lower.

Prices in Vancouver, also among the country’s most expensive housing markets, have been unchanged since January. Vancouver is located in the Pacific province of British Columbia, where the provincial government has also moved to curb demand.

The new housing price index excludes apartments and condominiums, which the federal government says are a particular cause for concern and which account for one-third of new housing.