It continues to be a tale of two cities in Alberta when it comes to the price of a new home—and the tales in Edmonton and Calgary couldn’t be more different.
According to the latest information released by Statistics Canada, the index of new homes in Calgary reached 109.7 in June (with the index of prices in 2007 set equal to 100). That’s 7.3 per cent higher than June of last year.
Up the highway, Alberta’s capital city reported virtually no change in the price of a new home. Edmonton’s index in June stood at 91.1. Over the last four years, new home prices have been stuck essentially unchanged at close to an index of 90 (see chart). That means prices are nearly 10 per cent lower than they were in 2007.
Both cities continue to do well economically and attract growing populations from interprovincial migration. The difference can be attributed to higher building costs in Calgary. Statistics Canada reports: “New home prices in Calgary rose ... as builders continued to report higher material and labour costs, good market conditions and higher costs for developed land as the reasons for the gain.”
Over the last three years, the price of a new house in Calgary has risen by 14 per cent. The cost of the land itself has risen by 7.3 per cent. But the cost of building the house—which includes material and labour—has risen by a much steeper 19.3 per cent.
**Article courtesy of Todd Hirsch, Chief Economist with ATB Financial. Thanks Todd!!
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