THE cost of buying a new home in Winnipeg continued to climb at one of the fastest paces in the country in January, with the biggest pressure coming from the spiralling cost of land.
Statistics Canada said Thursday the cost of buying a new home jumped by 0.9 per cent from December to January, and was up 5.9 per cent from a year earlier.
That was the second-biggest monthly price hike among the 21 metropolitan areas surveyed, and the biggest year-over-year increase.
January's price gains came on the heels of a 0.8 per cent monthly increase and a five per cent year-over-year increase in December. As was the case in December, the hefty increases were blamed primarily on the rising cost of developed land.
Statistics Canada said the cost of a serviced residential lot was up three per cent for the month, and 9.6 per cent for the 12-month period. The cost of the house alone, by comparison, was up 0.1 per cent from December to January, and 4.2 per cent for the 12 months.
Nationally, the new housing price index inched up 0.1 per cent from December to January, and by 2.2 per cent for the January-to-January period.
A spokesman for the Qualico Group of Companies said several things are driving up the cost of serviced lots. They include the rising cost of the undeveloped land; the rising cost of servicing that land and the higher costs associated with obtaining building permits, said Eric Vogan, Qualico's land development manager.
Vogan said the price of undeveloped land had increased five-fold since the mid-1990s, or an average of 11.2 per cent per year. During that period, building permit costs have tripled, he said, and the average cost of servicing a 50-foot-wide lot has jumped to about $125,000 from about $40,000.
Vogan said these cost increases are reflected in the price developers charge builders for a serviced lot. And Manitoba Home Builders Association president Mike Moore said builders can't afford to absorb the increases, so they're passed on to the homebuyers.
Canada Mortgage and Housing Corp. said the average cost of a new home is expected to climb by 3.1 per cent to $415,000 this year.