Canada is the hottest housing market in the G7
Canadian new home prices rose 1.2% m/m in September compared to +0.5% expected. In August they also rose 0.5% m/m.
Some of this jump is because of the higher costs of construction materials but it's mainly a demand story led by ultra-low rates and pandemic dynamics. Prices were up in 24 of 27 cities including Toronto and Vancouver.
Nationally, prices were up 3.2% y/y.
The main bubble in Canada is in existing houses but that's because there isn't enough new supply coming onto the market. The country suffers from rampant NIMBYism, awful rules on urban construction, environmental blockading and a total lack of urgency to fix the problem.
Meanwhile, the CMHC is looking utterly inept after forecasting in May that prices would fall 9-18% in the year.
