Metro Vancouver new home prices show steepest drop nationwide

August 15, 2009

By Derrick Penner, Vancouver Sun, August 12, 2009

Despite a rebound in Metro Vancouver real estate resales, June new-home prices continued to slide as builders adjust to changes in the market.

Statistics Canada said Wednesday that Metro Vancouver new-home prices dipped 0.9 per cent from May to June, the biggest monthly decline among Canada’s major centres, and stood 9.1 per cent below prices in June of last year.

Nationally, new-home prices slipped 0.2 per cent, the ninth straight month of decline, despite predictions the slide would likely end.

“In general, [new-home prices] are a lagging indicator in the market,” said Robyn Adamache, a market analyst with Canada Mortgage and Housing Corp.

Adamache said the housing resale sector sets the tone for the overall market, but it takes some months for the new-home market to follow.

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The strong home sales activities and gains in home prices over the past few months are in sharp contrast to the above report. Weaknesses in the new housing market as reflected in decline in new home prices and housing start will need to bottom out, before new construction pick up again.

You can view the CMHC July, 2009 housing starts chart as presented by Housing Analysis to appreciate the contraction in new housing activities. The implementation of the new HST next year will further affect the new housing market.

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