According to the latest information released this morning from Statistics Canada, the index of new home prices in Calgary reached 109.9 in July, an increase of 6.7 per cent over July of last year. Edmonton, however, continued to show no increase—its index was unchanged at 91.1. (The index sets prices in 2007 equal to 100. That means new residential prices in Calgary are higher by nearly ten per cent compared to seven years ago, while Edmonton new home buyers are seeing prices about nine per cent lower.)
This ongoing split is odd given that new data show Edmonton’s population growth is outpacing Calgary’s. More people moving into the capital region should, in theory, boost housing demand and drive prices higher.
The gap between the two cities can be attributed to higher land and building costs in Calgary. Statistics Canada states “builders (in Calgary) continued to report higher material and labour costs, good market conditions and higher costs for developed land as the reasons for the gain.” Land for residential development in and around Calgary has been somewhat restricted. This has limited the supply for home builders and boosted price.