Contractors' selling prices for new homes decreased 0.6 per cent between December and January, Statistics Canada reported Wednesday.

The agency said the largest decreases were recorded in cities in Western Canada, and the pace of decrease in January was slightly faster than the 0.1 per cent decline observed the previous month.

Prices declined 2.8 per cent in Edmonton, 2.1 per cent in Calgary, 1.1 per cent in Victoria and 0.7 per cent in Vancouver in that period. Builders in those four cities reported unfavourable market conditions.

Contractors' selling prices for new homes in New Brunswick, however, increased between December and January.

In Saint John, Fredericton and Moncton, new housing prices increased 1.4 per cent from a month earlier.

Statistics Canada said builders in New Brunswick increased their list prices or returned to their list prices, after reporting lower negotiated prices in previous months.

Meanwhile, in St. John's and Saskatoon, prices for new homes increased 0.8 per cent from a month earlier, while in Quebec City prices increased 0.6 per cent.

Statistics Canada said the new housing price index decreased by 0.8 per cent in January compared with the same month in 2008. The drop was the first year-over-year decrease in Canada since January 1997.

Year-over-year declines were recorded on the Prairies, with a 10.4 per cent decrease in Edmonton, a 6.5 per cent decrease in Calgary and a 2.7 per cent decrease in Saskatoon.

In B.C., Victoria reported a year-over year decline of 4.2 per cent, while Vancouver posted a 3.2 per cent decline.