New housing price index

Understanding this indicator

What it is

Statistics Canada's New Housing Price Index (NHPI) tracks the prices builders charge for new single-family houses, semi-detached houses and townhouses. The index equals 100 in December 2016, so a value of 125 means the same kind of new home costs about 25% more than it did then.

How it's measured

Each month Statistics Canada surveys builders about their selling prices for new homes whose specifications haven't changed since the previous month: same size, features and lot. Holding the house constant means the index measures price change, not a shift towards bigger or smaller homes. It includes an estimate of the land value.

How to read it

• Compare changes, not levels: a 2% rise over 12 months means prices for comparable new homes rose 2%.
• Because 2016 = 100 everywhere, a higher index in one city than another means faster growth since 2016, not more expensive homes.
• A falling index often reflects builders cutting prices or offering incentives to move inventory.

Limitations

• It doesn't cover resale homes or condominium apartments.
• It isn't an average price, so it can't tell you what a home costs.