Canada's 16 month 'lull' is over

The price of new homes in Canada rose by 0.1% in December over November and 6.2% from December 2006, the first time in 16 months that year-over-year growth increased, Statistics Canada said on Monday.

Market analysts had on average predicted that prices would rise by 0.3% in December over November. The annual increase was mainly due to strength in the housing market in the Prairie Provinces of Saskatchewan and Manitoba.

The strongest growth recorded by any one city was the 45.1% seen in Saskatoon in Saskatchewan, where prices were pushed up by increased costs for dry wall and concrete. The year-on-year figure for November 2006 had been 47.9%.

In the booming oil-producing province of Alberta, prices in Edmonton were up 21.5% from December 2006, slightly below the 21.7% recorded in November.