MNI DATA ANALYSIS:Cdn Hse Prices Feel Cost Of Softwood Lumber>

By Yali N'Diaye

     OTTAWA (MNI) - Canada new housing prices edged up 0.1% in June 

after remaining flat in May, with prices across the country feeling the 

higher cost of softwood lumber, Statistics Canada reported Thursday. 

     "Rising construction costs" were the main factor behind the price 

increase. Softwood lumber prices were up 34.3% year-over-year in June, 

according to the industrial product price index. 

     On a 12-month basis, however, price growth slowed down to 0.8% in 

June from 0.9% in May, the smallest gain since February 2010. 

     House only prices rose 0.3% after remaining unchanged in May, the 

largest monthly increase since July 2017. Prices were up 0.9% 

year-over-year, the smallest advance since January 2010. 

     Meanwhile, land only prices continued to increase at a steady pace 

of 0.1% on the month, for a 12-month appreciation of 0.8%. 

     --BETTER VANCOUVER CONDITIONS 

     Most metropolitan areas - 11 out of 27 - recorded higher monthly 

prices in June, led by Montreal and Ottawa. 

     While higher construction costs across the country were cited as a 

factor, the 0.2% gain in Vancouver was mostly explained by market 

conditions. The increase followed five months of flat prices. 

     In British Columbia, prices edged up 0.2% in the second quarter and 

0.1% in the first quarter. 

     Monthly prices were stable in 10 areas, including Toronto, where 

prices have been flat or down since November last year. 

     Prices fell 0.9% in Toronto in the second quarter after 

depreciating 0.6% in the first quarter. 

     At the provincial level, prices declined 0.3% in Ontario in the 

second quarter after a 0.1% decrease in the previous quarter. 

     --YEAR-OVER-YEAR SLOWDOWN CONTINUES 

     While monthly price growth accelerated in June, price growth 

continued to slow on a 12-month basis, to 0.8%, the smallest gain in 

more than eight years. 

     In Vancouver, prices rose 3.4% after a 4.8% advance in May, marking 

the smallest increase since March 2017. 

     In Toronto, prices fell a further 1.3% year-over-year in June. 

     --SOLID SUPPLY 

     On the supply side, Canada Mortgage and Housing Corporation 

reported Thursday that housing starts decreased to a seasonally adjusted 

annual rate of 206,314 units in July, down from 246,200 units in June, 

and below analysts' expectations. 

     However, the six-month trend remained at a solid 219,988 units. 

     "Despite decreasing in July, the trend remains well-above 

historical averages, reflecting elevated levels of multi-unit starts in 

most major markets that has more-than-offset declining single starts," 

CMHC said. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com

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