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A Spotlight on Newfoundland Real Estate

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Since the beginning of the coronavirus pandemic, the Newfoundland and Labrador real estate market has seen the best of times and the most modest of times. In other words, the Atlantic Canada housing market has enjoyed a pandemic boom, but prices have not mirrored what was taking place in British Columbia or Ontario.

Despite climbing interest rates that have ostensibly impacted many major urban centres, small towns and rural communities across the country, Newfoundland and Labrador have held steady. The province and its municipalities have not fallen off a cliff. Instead, despite waning demand, prices have remained intact and affordable.

So, what occurred in the eastern province’s real estate market? Let’s explore the latest data!

A Spotlight on Newfoundland Real Estate

New real estate association data confirmed that demand is showing signs of cooling off in one of Canada’s most affordable housing markets.

According to the Newfoundland and Labrador Association of REALTORS® (NLAR), residential property sales tumbled 4.7 per cent year-over-year in August, totalling 667 units. Year-to-date, home sales were relatively flat from the same time a year ago, with 4,229 units exchanging hands in the first eight months of 2022.

On a historical basis, home sales were 16.5 per cent above the five-year average in the Newfoundland and Labrador real estate market. They were also nearly 30 per cent above the decade average for this time of the year.

Newfoundland and Labrador real estate prices remained strong in August, as MLS® Home Price Index (HPI) surged at an annualized pace of 8.9 per cent in August to $286,000. The overall composite HPI benchmark price index is considered more accurate than relying on average or median price measurements.

Meanwhile, prices for various residential property categories continued their upward trajectory from a year ago. Here is how these housing types performed in August:

  • Single-Family Homes: +9% to $288,000
  • Townhomes: +5.9% to $276,200
  • Apartments: +10.4% to $222,000

The average sales price for homes sold in August jumped 8.1 per cent year-over-year to $300,490. Year-to-date, they were also up more than seven per cent to $292,714.

The Newfoundland and Labrador housing market conditions were robust because of inadequate inventory levels in August.

The number of new residential listings tumbled 16.8 per cent to 889 new units, the lowest reading in the month of August in more than five years. Active listings were down nearly 34 per cent to 3,069 units, a decade low. New listings were 11.4 per cent below the five-year average, while active listings were close to 38 per cent below the five-year average.

Months of inventory, which gauges the number of months it would take to exhaust current supplies at the present level of sales activity, dropped from 6.6 a year ago to 4.6. This is also below the long-run average of ten months for this time of the year.

New housing construction activity has been decent, according to fresh statistics from Canada Mortgage and Housing Corporation (CMHC). Housing starts totalled 90 units in August, up 50 per cent from the same month last year. Year-to-date, there have been 535 housing starts, up more than 39 per cent from the first eight months of 2021.

How is the St. John’s Housing Market?

Residential sales activity slowed down considerably in the St. John’s real estate market. But local housing experts contend that this may have more to do with demand outpacing supply, as competition is still sizzling amid the broader Canadian real estate market downturn.

NLAR data show that home sales were down 11 per cent year-over-year in St. John’s, with single detached home transactions plummeting more than 22 per cent.

The overall MLS® HPI composite benchmark price for homes in St. John’s advanced by $322,500 in August, up 8.4 per cent year-over-year. In addition, the benchmark price for single-family homes in St. John’s surged 8.8 per cent year-over-year to $334,100. The benchmark price for townhomes jumped 5.9 per cent, while apartment prices spiked 11.8 per cent to $221,500.

The story is different elsewhere in the country. In the rest of the Prairies and the Atlantic Region, prices are holding up better,” TD Bank wrote in a research note. “The former has been supported by some of the best affordability conditions in the country, while the latter region is drawing support from robust population growth and relatively tight conditions.”

What About 2023?

While higher interest rates were expected in 2022, many market analysts did not anticipate the Bank of Canada (BoC) would be as aggressive as it has been. This is mainly because experts did not think inflation would run this high for this long. Therefore, the prolonged slump in the Canadian real estate market may be slightly more surprising than initially expected.

So, does this mean 2023 could be preparing for a significant crash? Industry analysts have been apprehensive about using the term “crash.” Still, they have warned about notable corrections and sharp downturns throughout the country’s housing sector, except for perhaps Atlantic Canada.

Although TD Bank is projecting a 20 to 25 per cent decline in average home prices in Canada in the first quarter of 2023, the NLAR thinks conditions will be a more tepid decline of two per cent in prices in 2023.

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

The Canadian Press. All rights reserved.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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