CALGARY - Price gains in Calgary’s new home market are far outpacing what is being seen across the rest of the country.

Statistics Canada reported Thursday that the New Housing Price Index rose in August by 6.8 per cent on an annual basis and by 0.5 per cent on a monthly basis in the Calgary census metropolitan area. Both represented the biggest growth rates in Canada.

“Builders reported that land development costs, as well as strong market conditions and increased demand, were the main reasons for the price gain,” said the federal agency.

Across Canada, the NHPI rose by 0.3 per cent month-over-month and by 1.5 per cent year-over-year.

“While both the land and house components (in the Calgary area) recorded year-over-year gains in August, it was more pronounced for the house component. Housing demand in Calgary has been strong, supported by economic factors such as job creation and the heightened levels of net migration in recent years. This, along with input cost pressures from the material and labour components, resulted in a stronger gain for the house component in August, said Felicia Mutheardy, acting senior market analyst in Calgary for Canada Mortgage and Housing Corp.

To put Calgary’s annual gain in perspective, the next highest year-over-year growth was Hamilton at 3.0 per cent.

“Reflecting the near record housing demand trend of resale market in Calgary, the city’s (New Housing Price Index) is leading the country as demand outstrips supply, labour costs begin to escalate thus making homes more pricey and a limited number of available and serviced lots are limiting the number of new units available,” said Don Campbell, senior analyst with the Real Estate Investment Network.

“This trend is not slated to slow down until we witness either a freeing of a large number of serviced lots or the in-migration begins to slow down substantially and for a long period.”

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