New home prices increase on P.E.I.

Statistics Canada says the price of a new home in Charlottetown increased by 1.3 per cent in July, more than anywhere else in the country.

It's part of a bigger trend in the citynew homes increased in price three per cent since July 2010.

Peter Norman, an economist specializing in the housing market, said the price increase doesn't necessarily mean homebuilders are earning more.

"Certainly if we see housing prices rising, a component of what the consumer pays is going to be the profit or net revenue for the builder, but if your costs are going up, if you're able to pass some of those costs on, your net revenue sort of stays constant."

Norman said Charlottetonians should expect home prices to soften in the next year.