St. John’s housing market had a brisk first quarter resulting in a 6 per cent increase in sales compared to the same period last year. Oil’s price volatility has slightly decreased consumer confidence. However, the region has made very significant price gains during the past ten years and off-shore oil companies like Hibernia are still hiring. The region’s population, income levels and employment levels are stable.
• Low interest rates and excellent selection of inventory are benefiting buyers
• Retirees are increasingly selling their houses and moving into rentals to release equity in their home
• Buyer activity among parents purchasing property for their university-age children is high
Entry-level condominiums have been popular with downsizers. Currently, there is ample supply offering excellent selection. Development projects, built to meet the demand caused by the oil industry, have resulted in high condo inventory. Building has been scaled back, reducing the number of new specs from 12 to 4.
First-time buyers represent 50 per cent of the region’s market activity. A growing trend for first-time buyers in the region is buying in suburban areas that offer more space. A popular location is Conception Bay South, where young buyers can get a home for $240,000 if they are willing to do the 15 to 20 minute daily commute into the city.
The upper-end market is fairly active showing a modest year-over-year decrease in inventory. Quality listings are in demand as potential luxury buyers are proving resilient while other housing types are firmly in a buyer’s market. Low interest rates and stable professional employment are both significant drivers of demand.
Region is expected to stay in a buyer’s market throughout the remainder of 2015
• As oil prices stabilize, St. John’s housing market is also expected to stabilize
• Although the lower Canadian dollar has greatly enhanced American tourism to the area, the favourable exchange rate is not expected to draw US buyers to the region
• Potential provincial budget cuts, which are expected after the federal budget, are creating uncertainty in local market confidence
• RE/MAX’s 2015 average residential price expectation for St. John’s is unchanged and expected to remain flat