New home prices across the country fell 0.2 per cent on a month-to-month basis in June after a 0.1 per cent decline in May, Statistics Canada revealed Wednesday.

In June, the agency's new housing price index was down 3.3 per cent from its level in June 2008, with the largest declines registered in Western Canada.

People walk past new houses for sale in Oakville, Ont., in April. After strong gains for several years, Canadian prices for new homes have weakened throughout 2009, Statistics Canada data suggests. (Nathan Denette/Canadian Press)

The largest monthly drop, of 0.9 per cent, was in Vancouver, where some builders lowered their prices to stimulate sales and sell off their houses in inventory, while others offered free upgrades and cash incentives. A small number of builders did increase their prices on some popular models that were selling well.

Next to Vancouver, the largest monthly declines were in Edmonton (0.8 per cent) and Victoria (0.5 per cent).

The largest monthly increase in new housing prices was the 0.5 per cent increase recorded in Saskatoon, followed by 0.4 per cent increases in both Winnipeg and St. John's.

Montreal, Ottawa–Gatineau and Hamilton saw monthly increases of 0.1 per cent.

On an annual basis, 12-month declines were recorded in Edmonton (11.7 per cent), Saskatoon (10.4 per cent), and Calgary, at 8 per cent.

At 9.1 per cent and 7 per cent, respectively, Vancouver and Victoria also posted year-over-year declines.

The decreases in these five Western Canadian cities follow a period of significant highs in the new housing price indexes at the end of 2007 and the beginning of 2008, when strong economic conditions and high demand for new housing pushed up contractors' selling prices.

Continued strength in the economy in St. John's led to an annual increase of 10.3 per cent, the agency said. That was the highest annual increase in the country.

In Quebec City, the 12-month growth rate was 6.8 per cent, while in Montreal, prices increased 1.9 per cent.

Compared with June 2008, contractors' selling prices were 3.6 per cent higher in Saint John, Fredericton and Moncton.

At 3.5 per cent and 1.7 per cent, respectively, Regina and Winnipeg also posted increases.