Canadians have faced extraordinary circumstances over the past few months due to the ongoing global pandemic. In efforts to contain the virus, people have been practicing social and physical distancing, which has affected how they work, spend money and the Canadian real estate market. When it comes to the market in St. John’s, many are left wondering how the capital of Newfoundland and Labrador is faring these days.
St. John’s is the main financial, commercial and cultural centre of the province, and the city is home to a variety of suburban neighbourhoods, shopping complexes and industrial areas. Although the fishing industry is still important in St. John’s, the city is known today as the main service centre for the province’s offshore oil and gas industry. St. John’s is a growing metropolitan area with lots to offer, and it’s no wonder one-third of Newfoundland’s population chooses to live here.
Although housing prices are still relatively low in St. John’s compared to other Canadian markets, prices are expected to increase.
Late last year, RE/MAX was anticipating a two-per-cent decline in prices in 2020 for St. John’s Metro. Buyer’s market conditions were expected to prevail in 2020, a continuing trend from 2018-2019.
St. John’s housing market offers exceptional affordability versus many other major cities across Canada, and this is a leading reason why it is an attractive place to settle down for many people. First-time homebuyers were expected to drive the market in 2020, with the Galway subdivision in high demand.
Home Sales in St. John’s
Home sales are down in St. John’s and Newfoundland & Labrador. The Newfoundland And Labrador Association of Realtors reported that residential transactions in St. John’s fell by 61 per cent on a year-over-year basis in May 2020, while home sales in the rest of the province were down 37.4 per cent.
When we look at single detached homes in St John’s, there was a decline of 62.1 per cent from levels in April 2019.
Examining the overall supply of homes on the market, we can see that there was quite a drop comparing this year to last year. There were 4,013 active residential listings at the end of May, which is a decrease of 27 per cent from the same time last year.
Housing Prices in St. John’s
Housing prices in St. John’s remain low, however, there is an expectation that they will experience an increase over the next several years.
Province-wide, the average price of homes sold in May 2020 was $228,519, down 2.3 per cent year-over-year.
However, due to improvements in the labour market and in the unemployment rate in St. John’s, we could see housing prices in St. John’s begin to crawl higher over the next several years.
Effects of Low Housing Prices in St. John’s
There are several effects that low housing prices can have on a housing market such as St. John’s, including the rate of housing construction and the willingness of homeowners to put their properties on the market.
When housing prices are very low, there is a tendency for a slowdown in housing construction. There is the expectation that a reduction in new home construction in St. John’s will affect housing prices, leading to an eventual increase in prices.
Another effect of low housing prices is that when prices are low, homeowners have the tendency to keep their houses off the market. This will mean fewer homes for sale, leading to a decrease in supply and therefore encouraging prices to go up.
With home sales down and prices remaining low, those looking to purchase a property in St. John’s could find this that now is an opportune time.
Buying a new home during the pandemic does come with its challenges; you may be wondering how the quality of services will differ during this time. Luckily, most activities relating to buying or selling a home can be done online. If you are interested in entering the real estate market, always make sure that you work with a qualified Realtor who can best guide you through the market.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
