Canada's housing market is facing increasing pressure as new-house prices slipped for the third consecutive month. According to Statistics Canada, the new-house price index fell by 0.2% in November, following a similar decline in October. On a year-on-year basis, prices were down by 0.9%, with most housing markets across the country reporting lower prices.
Sales of existing homes also experienced a decline of 0.9% last month, contributing to the overall downturn in the housing market. Benchmark house prices, calculated using a method similar to the S&P CoreLogic Case-Shiller National Home Price Index, fell by 1.1% compared to the previous month. Additionally, housing starts plummeted by 22% in November, reaching the lowest level in six months.
Bank of Canada Governor Tiff Macklem addressed the situation in a recent speech, acknowledging progress made in combating inflation. However, he stressed that rate cuts should not be discussed at this stage, as there is insufficient evidence of sustainable inflation returning to the central bank's 2% target.
Statistics Canada revealed that new-house prices either declined or remained unchanged in 25 of the 27 metropolitan areas surveyed. To incentivize sales, many builders in the 15 areas where prices declined offered various incentives, including design credits and rebates.