The price of a new house in Calgary increased 0.3% in September according to the New House Price Index released today by Statistics Canada. Year-over-year, prices were up 2.1% in September. The monthly increase was due in part to builders moving to new areas with higher land development fees.
Nationally, the NHPI increased 0.2% in September and was up 2.7% from the previous year. The 3 largest year-over-year increases were recorded in:
- Regina (+6.1%)
- Winnipeg (+5.2%)
- St. John’s (+4.9%)
Of the 21 metropolitan areas surveyed, 4 registered annual declines:
- Charlottetown (-2.2%)
- Greater Sudbury and Thunder Bay (-1.2%)
- Victoria (-0.6%)
- Windsor (-0.5%)
Source: Statistics Canada (click to enlarge)
Note: The New Housing Price Index (NHPI) measures changes over time in the selling prices of new residential houses agreed upon between the contractor and the buyer at the time of the signing of the contract. It is designed to measure the changes in the selling prices of new houses where detailed specifications pertaining to each house remain the same between two consecutive periods.
Calgary has a bad case of urban sprawl, thus I agree with charging more for land development fees if it’s growing the spawl and stretching the services further out. But, there is a strong case for re-sale homes vs new homes. With a re-sale home the land price is “built in” to the price and when it comes to the nuts and bolts, houses lose value each year till they are worthless and sold as “Land Value Only”… So really, land is what holds value, not the house.
We have a friend who is looking to buy new paying $180k just for a normal distressed position lot, trying to convince him to buy re-sale.