New Housing Price Index in Niagara

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The New Housing Price Index (NHPI) measures changes over time in contractors’ selling prices for new homes. The New Housing Price Index is recalculated with the NHPI equalling zero and up or down being measured again from that point (2007 was the year of recalculation).

Table 5.3

2006 2007 2008 2009 2010
Canada 93.1 100 103.4 101 103.2
Ontario 97.5 100 103.5 103.6 106.1
Niagara 96.2 100 104.3 103.8 104.5
Hamilton 95.9 100 102.8 101.7 103.3
Windsor 102 100 100.4 100.5 99.7

http://publications.gc.ca/collections/collection_2011/schl-cmhc/nh12-235/NH12-235-2011-1-eng.pdf

In 2007, before the readjustment of the NHPI back to 100%, the comparable New Housing Price Index for Niagara was 150.1, close to the 153.0 rate for Canada and Kitchener (150.1); higher than Windsor (103.2) and Hamilton (148.4); but not near the growth in Calgary (246.6) or Edmonton (234.4). Growth for these 2 cities has since slowed. Source: http://www40.statcan.ca/l01/cst01/manuf12.htm

Housing forecast for Niagara:

According to CMHC, home sales are projected to decline in 2011 across Niagara, but regain most of what was lost in 2012, if supported by increasing employment.  It is estimated that, on average, home price growth will match inflation over the next two years, but the pace will accelerate in 2012 if the resale market tightens up. With less demand spilling over from the resale market to the new home market, housing starts are predicted to decline by almost 9% in 2011, but recover fully the next year. New listings are expected to decline faster than sales, which will result in a tighter market. The downward trend in the average resale price reversed in the first quarter of 2011 and prices are predicted to grow modestly, and be more in line with inflation for the rest of 2011. The median resale price increased slightly in the first quarter of 2011, but a reduction in the gap between median and average resale home prices indicates that demand is increasing mostly at the lower end of the price market.

Wages need to keep pace with costs of building new homes possible and affordable. For those with low income, home ownership is often impossible; their income has not kept pace with the rise in building costs.

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