Housing prices increased 4.1 per cent between May 2007 and May 2008, according to Statistics Canada. (Patti Edgar/CBC)

Contractors' selling prices in May for new homes increased modestly — the slowest rate of increase in nearly six years, Statistics Canada said Friday.

In year-over-year comparisons, selling prices increased 4.1 per cent between May 2007 and May 2008 as compared with a yearly increase of 5.2 per cent recorded in April.

The federal agency attributed the slowdown to cooling markets in Alberta and B.C.

Saskatchewan recorded the largest increase, with annual increases measuring 30.4 per cent in May, down from 34 per cent in April. Contractors attributed the rise to high labour and material costs. In Winnipeg, contractors' prices increased 16.1 per cent in yearly comparisons.

Meanwhile, new housing prices in Edmonton and Calgary declined between April and May though in yearly comparisons, prices in Edmonton rose 3.3 per cent over May 2007. In Calgary, prices increased 0.6 per between May 2007 and May 2008.

Likewise in Vancouver, prices fell between April and May although they increased 2.7 per cent in year-over-year comparisons.

Labour and land costs in St. John's, N.L., increased to record levels, rising 18.8 per cent between May 2007 and May 2008 and 16.3 per cent between April and May 2008.

Prices in Montreal also increased to their highest point in three years, rising 5.7 per cent in yearly comparisons. In contrast, Windsor remained the only city in which housing prices declined, falling 0.2 per cent. Prices have dropped in the Ontario city for 22 of the last 26 months.