Reuters - September 09, 2010
New home prices edged lower in July for the first time in 13 months as a new tax regime took effect and the once-hot housing market continued to cool, according to Statistics Canada data released on Thursday.

The new housing price index slipped 0.1 percent in July, while analysts in a Reuters poll had forecast a 0.1 percent increase. Home prices climbed 0.1 percent in June.

Statscan said the introduction of a new sales tax in July in Ontario and British Columbia, which blends the provincial and federal taxes into one, may have caused monthly declines in housing index in those two provinces.  Previously, a provincial sales tax on building materials was embedded into the selling price of new homes. That tax is excluded from the price calculation under the new regime.

The top contributors to the monthly decrease were cities in British Columbia and Ontario - Vancouver, London, Sudbury and Thunder Bay. Prices fell on a monthly basis in seven of the 21 cities surveyed, fell in three and were flat in 11.   

Year-over-year, the new home price index was up 2.9 percent in July, following a 3.3 percent rise in June. The housing only component of the new housing price index fell 0.1 percent on a monthly basis and rose 4.5 percent on the year. The land only component was down 0.2 percent in July and slipped 0.4 percent on the year.

In a separate report, the Canada Mortgage and Housing Corp. reports the annual rate of housing starts fell three per cent in August. The annual rate was 183,300. That was down from a revised rate of 188,900 in July.