The New Housing Price Index (NHPI) is calculated by using both contractors’ selling prices of new residential housing and their estimates of the current market price of the land. The NHPI is usually presented as one figure, but when we split Alberta’s to examine housing and land prices individually, we get a better look at the province's market.
Developers and contractors continue to seek out viable land in Calgary, a demand that has been keeping prices up since 2009. Calgary’s prices for new homes are rising more sharply than contractors’ land price estimates. As the city's overall economy strengthens, demand for housing and usable land will rise.
Edmonton is a different story. Since March 2009, the price of a new home has gone up 2.6 per cent. Contractors’ land price estimates have fallen 5.7 per cent. Both fell sharply in 2008 and haven’t seen any significant growth since the decline.
It’s a mystery why Edmonton’s new housing prices and land estimates are still below 2007 levels. However, Edmonton’s healthy economy might help the numbers start to rebound.