House prices hold up

The price of new housing edged up 0.3 per cent from January to February 2008, said Statistics Canada.

The rate slowed down after two months of accelerated growth but followed a downward trend which began in September 2006, said the federal agency.

Contractors' selling prices increased 6.2 per cent in February 2007 from a year earlier. The year-on-year growth was slower than the 6.5 per cent yearly increase seen in January.

In British Columbia, the federal agency reported a 6.6 per cent rise year-on-year in Vancouver and an increase of 1.6 per cent in contractors' selling prices in Victoria.

Prices in Saskatoon again rose at the fastest rate.

Annual prices in the city increased 58.3 per cent -- the fastest rise on record in the city. Prices in Saskatoon rose 4.3 per cent month-on-month in February.

Regina, meanwhile, recorded a year-on-year price hike of 28.6 per cent -- up from 25.9 per cent year-over-year growth in January.

Statistics Canada said that builders reported higher prices due to a rise in the cost of materials, as well as labour shortages pushing up the cost of labour.

"Clearly Saskatchewan is the new Alberta, with economic growth there being driven by the commodity price boom." said Jacqui Douglas, economics strategist at TD Securities.

Strong demand continued for new houses in Saskatchewan on the back of a healthy natural resource sector as well as the push to encourage migrants to the province in an attempt to alleviate the labour shortage.

The rate of year-on-year growth of new housing prices in Edmonton slowed to 14.8 per cent in February -- the seventh consecutive deceleration in growth.

Prices in Calgary increased 5.2 per cent in February 2008 compared to a year earlier.

This showed a slight decrease on the 5.6 per cent yearly rise reported by Statistics Canada in January.

The federal agency said that the departure of some migrants from Alberta meant that there were more resale houses on the market contributing to slower sales in the new housing sector.

Both Calgary and Edmonton saw a decline month-on-month with prices falling 0.3 per cent and 0.9 per cent, respectively.

In the East, Statistics Canada said that builders reported increased material and labour costs coupled with higher land development costs contributed to record price increases in Newfoundland and Labrador and in Nova Scotia.

Prices in St. John's. N.L., rose 12.2 per cent year-on-year and in Halifax the rise was 11.4 per cent.

In Ontario, prices in Windsor inched up 0.3 per cent from February 2007 -- the first inflation in 17 months.

(prepared by Helen Morris/Vancouver Province)