The price of a new home in Canada continued to dip lower last month, suggesting the country’s housing market may be starting to cool amid a high interest rate environment.

The Statistics Canada’s New Housing Price Index slipped 0.1% month-over-month in April, with prices across 20 of the 27 census metropolitan areas (CMAs) remaining either unchanged or on the decline. Compared to one year ago, the price of a new home was down 0.2%, marking the first annual drop since November 2019 and a stark change from the April 2022 year-over-year increase of 9.4% amid a real estate boom.

However, thanks to the Bank of Canada’s aggressive rate tightening cycle that started spring 2022, the housing market started to stagnate, with the Canada Mortgage and Housing Corporation last month reporting a 63.2% annual gain in excess inventory of newly built homes. The CMA of Victoria noted a 2.7% decline in prices in April 2023— the largest among the CMAs, followed by Kitchener–Cambridge–Waterloo and London, with drops of 1.5% and 1%, respectively.

Quebec, meanwhile, reported the largest 12-month increase in April, with new home prices rising 3.9%, as did Halifax and Montreal, where prices rose 1.8% and 1.4%, respectively.

Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.