05/09/2013 11:21 EDT | Updated 07/09/2013 05:12 EDT

New home prices edge higher

A key index of new home prices edged up by 0.1 per cent in the month of March, largely on the strength of the booming Calgary real estate market, Statistics Canada said Thursday.

New house prices rose 0.3 per cent in Calgary from February's level, making it the biggest contributor to the rise in the agency's new home price index.

"Builders indicated that increases in material and labour costs as well as market conditions were the main reasons for higher prices," Statistics Canada said in a statement.

On a month-over-month basis, the largest increase occurred in Regina (0.7 per cent). But because Regina is a smaller market, Calgary's increase had a bigger impact on the national index. Saskatoon and Windsor, Ont., reported monthly prices rises of 0.5 per cent.

Toronto-Oshawa saw prices edge up by just 0.1 per cent, while prices fell 0.2 per cent in the once booming Vancouver market. Statistics Canada said builders in Vancouver were lowering their prices to stimulate sales.

On a 12-month basis, the new home price index was 2.0 per cent higher than it was a year earlier. Winnipeg new home prices rose the fastest — 5.1 per cent. that was the fourth straight month that Winnipeg's new home prices have led the country's urban markets.

Annual prices rose 4.3 per cent in Calgary.

New home prices in B.C.'s biggest urban markets continued to fall on a year-over-year basis. Vancouver's prices fell 0.7 per cent, while Victoria's dropped 1.6 per cent.

Canada's real estate market has been unmistakeably cooling for many months now. Almost all housing indicators — new home prices, resale prices, numbers of sales, housing starts, and residential building permits — have been moderating or edging down recently.

Analysts say last summer's move by Finance Minister Jim Flaherty to further tighten mortgage lending rules has played a part in the cooling of a market that some observers say had become overheated.