The latest information, released this morning, suggests the index of new homes in Calgary reached 107.8 (with the index of prices in 2007 set equal to 100). That’s 7.5 per cent higher than March of 2013.
At the same time, Alberta’s capital city reported a small decrease. Edmonton's index in March stood at 90.9—about 0.1 per cent lower than a year ago. Over the last four years, new home prices have been 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.
The contrast between prices in the major cities is puzzling. Both cities continue to fare well economically. Edmonton actually holds a slight advantage in the labour market: its unemployment rate in March was 4.8 per cent, slightly lower than Calgary’s 5.0 per cent rate (three-month moving averages).
Some of the difference could be explained by the ongoing recovery from last year’s floods, which is still having an impact on material prices and building costs. With respect to Calgary’s hot market, Statistics Canada says: “Builders reported that higher material and labour costs, market conditions and the cost of developed land were the primary reasons for the increase.”