Canadians continued to pay more for new houses in September, Statistics Canada said Wednesday.

The cost of new homes increased 5.8 per cent year-over-year, driven higher by strong demand and rising costs for labour and building materials.

However, September’s increase was not as big as the 6.0 per cent year-over-year increase seen in August and July, and the 6.2 per-cent jump in June.

Victoria continued to post the largest 12-month increase for new homes with a jump of 8.7 per cent, followed by Winnipeg at 8.5 per cent and the St. Catharines-Niagara area of Ontario at 8.1 per cent.

Vancouver landed in the middle of the pack with prices up 5.5 per cent over the year.

“In this particular case, if you are number one in the country it is nothing to be celebrating because high costs impact home ownership,” said Peter Simpson, CEO of the Greater Vancouver Home Builders Association.

“We need to get these costs down, including the government levies which add so much to the cost of a new home.”

Housing prices across Canada were up 0.3 per cent between August and September, a somewhat slower rate than the July-August increase of 0.5 per cent. Prices were up 0.3 per cent for the month in Victoria and 0.1 per cent in Vancouver.

Simpson was surprised that the rate of price increases appears to be slowing as builders are facing higher costs for land, materials and labour. “We haven’t really seen any softening of prices but we have seen a slight softening in the numbers of people visiting the sites.”

“A lot of product has come on the market recently and the new offerings tend to get more attention than homes that have been for sale for longer.”

Last week Statistics Canada reported that building permits in B.C. were up 7.2 per cent in September over the previous month while the value of permits across Canada was down 3.3 per cent. B.C. is expected to be the only province to record higher starts next year.

© The Vancouver Sun 2004