Prices for new homes are still rising, says a report released yesterday by Statistics Canada.

According to its new-home pricing index, Victoria had Canada‘s largest 12-month price increases, with a 10.2-per-cent hike between December 2002 and December 2003. In comparison, Vancouver‘s new housing prices increased 3.9 per cent during the same period.

The increases are mainly due to higher prices for labour and building materials as well as higher land prices in some centres.

“Builders are doing what they can to hold prices down, but their costs are rising,” said Peter Simpson, chief operating officer for the Greater Vancouver Home Builders Association.

“When the cost of land, materials and labour are increasing, it’s a triple whammy. And it’s all added to the cost of housing.”

Chris Janssen, a business professor at the University of Victoria, said low interest rates are keeping mortgages affordable despite the rising cost of housing. But he said people may have to look outside urban centres for lower prices.

“Some people may have to suffer longer commutes if they work downtown,” Janssen said. “We may be heading in the same direction as Manhattan.”

The New Housing Index surveys selling prices in 21 urban centres across the country.

The current report shows housing prices in Canada increased an average of five per cent in the 12-month period.

© The Vancouver Province 2004