Prices of new homes in Canada posted a seven percent annual increase in February 2021.

According to a report by Statistics Canada, the increase from the same month in 2020 was the largest in over a decade since 2007.

In the Vancouver metropolitan region, the price of newly constructed homes rose 10.5 percent.

In Kelowna and Victoria, the annual increases were 5.6 percent and 5.5 percent, respectively.

Nationally, Kitchener–Cambridge–Waterloo registered the largest year-over-year gain in February 2021 at 16 percent.

The Toronto metropolitan region posted a 5.1 percent increase last month.

In a report Thursday (March 18), Statistics Canada said that rising construction costs and high demand for homes are driving prices up.

Moreover, the trend is expected to persist in the short term.

“Structural shift towards working remotely and needing more space at home, combined with low borrowing rates, high construction costs and low housing supply, will continue to put upward pressure on new house prices,” Statistics Canada stated.

The federal agency added: “Therefore, relatively affordable commutable communities near large urban centres such as Toronto, Vancouver and Montréal are likely to continue to attract buyers looking to capitalize on more flexible work arrangements in their search for larger living spaces.”