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Where new home prices have shot up the most in Canada

·2 min read
Ontario, Canada.
New home prices rose the most in Kitchener-Cambridge-Waterloo. (Getty)

New home prices in Canada are shooting up as buyers continue to snap up real estate.

Statistics Canada says prices rose 11.6 per cent year over year in December. The biggest increases weren’t in the country’s biggest cities.

Kitchener–Cambridge–Waterloo took the top spot with a 30.7 per cent year over year jump, breaking its previous record set in October 2021. Supply is the tightest it’s ever been, with only 0.2 months of inventory.

"The Tri-Cities' year-over-year growth is an indication of a larger upward trend we're seeing in markets across southern Ontario, including Hamilton and London,” Mary Johnson, Vice-President of StreetCity Realty, told Yahoo Finance Canada.

“As supply remains low, the search for affordable housing is pushing homebuyers to look beyond the Greater Toronto Area."

The area is also home to a strong high-tech sector, which didn’t bear the brunt of other types of job losses during the pandemic.

Windsor was up 22.6 per cent and Winnipeg was up 22.2 per cent. On a month-over-month basis, Winnipeg was up the most (2.8 per cent) as supply fell 16 per cent.

Although supply is tight in much of Southern Ontario, Johnson says smaller markets like Sarnia and Stratford offer opportunities.

"Best of all, these smaller markets offer affordable options that allow first-time homebuyers to get into the game. The dream of homeownership still exists but you need to drive until you qualify in order to find a suitable property," said Johnson.

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

Why new home prices are rising

There are a couple of factors pushing up prices. Builders face higher input costs from higher prices for materials like lumber. Statistics Canada says the cost of building a single-detached house grew by 23.9 per cent in the second quarter.

Supply chain disruptions meant builders had a harder time getting their hands on materials needed to build homes, which reduced supply and pushed up prices.

Statistics Canada expects the situation to continue in the short term because it will take time for the builders to bounce back to a pace that will satisfy the strong demand, which will continue to push prices higher.

Supply problems could actually worsen in the near term as CMHC reported housing starts fell 22 per cent in December.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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