In the past year, the St. John’s real estate housing market saw an 18.3 per cent increase in listings. This influx in inventory created buyer’s market conditions in 2014, and by the end of October, there was enough of a build-up in listings on the market to sustain a buyer’s market throughout 2015.
Despite the rise in inventory, properties on the market maintained their price last year, and the average residential sale price in St. John’s increased to approximately $313,000 in 2014 from $301,000 the previous year. The average residential sale price in St. John’s is expected to remain stable in 2015.
Many of the listings on the market in 2014 were newly built properties, both within St. John’s proper and just outside the city. Several new subdivisions were completed in the past few years, and many of these have been very slow to sell. Because of the downturn in sales for new builds, condo projects that were scheduled to begin construction next year were put on hold.
Many buyers and sellers in the St. John’s market are oil and gas or mining workers, who regularly transfer in and out of the city. Memorial University and the Health Sciences hospital are big employers as well, and many first time buyers work in education or health care. The tightened mortgage lending criteria had a significant impact on this group when the new regulations were introduced in 2012, but the impact has lessened as buyers have adapted to the new rules. In 2014, the impact of the lending criteria was mostly felt in the investment property and second home markets. Parents purchasing a house for their children while they were in university and people buying cabins as recreation properties were two buyer categories that decreased significantly in the past few years.
At the upper-end of the market, there was an abundance of selection in the $400,000 range. Newly built homes priced around $600,000 sold well, typically to buyers who work in the oil industry and were either moving up within St. John’s, or had relocated from outside the province. Resale properties in the upper-end of the market sold well too. In King William Estates, an established high-end area in St. John’s East End, on the rare occasion that houses do come on the market, they sell very quickly. The upper-end market is expected to remain stable in 2015, provided the builders continue to delay new development projects.
Overall, St. John’s is projected to see stability in 2015. Provided that building slows down, as is expected, inventory should start to diminish, days on market decrease, and average price should remain stable.