St. John’s housing market to favour buyers in 2021, prices expected to decline 2-3%
The St. John’s housing market is in store for another buyer’s market in 2021, with lots of housing inventory available for buyers to choose from. The city has bucked the current trend in many housing markets nation-wide, which are experiencing a shortage of housing inventory. Despite St. John’s abundance of housing supply characterizing this buyer’s market, the average price rose in 2020. Single-detached homes increased to $298,651 in 2020 (Jan. 1 – Oct. 31), compared to $285,846 in 2019 (Jan. 1 – Dec. 31). Meanwhile, the average price of condominiums in the region increased to $239,902, up from $214,217 in 2019 (Jan. 1 – Dec. 31). The RE/MAX outlook for St. John’s residential real estate in 2021 is a decrease of 2% to 3% to approximately $285,027 across all property types.
Residential sales in 2021 are expected to lower than 2020 transactions, but on par with 2019 numbers. St. John’s Metro area currently has about nine months of inventory, down from 11 months in 2019. While the number of homes for sale has decreased in 2020 compared to past years, the downward trend is not expected to continue. Current supply levels are expected to continue or increase slightly in 2021. The number of days it took to sell a home decreased in 2020, however days on market are likely to maintain current levels or increase slightly in 2021.
Who’s driving the St. John’s housing market?
First-time homebuyers are expected to drive housing demand in 2021, with two-storey detached homes being in highest demand. This is the most popular style of home in the St. John’s Metro area, offering additional living space and more appealing layouts. First-time homebuyers entering the St. John’s housing market are likely single buyers and young couples, seeking single-detached homes in the $250,000 to $350,000 price range. With mortgage rates at an all-time low, 2021 is expected to be more attractive for first-time homebuyers to enter the market. Sales in 2020 resulted in a lot of multiple offers and offers coming in over asking price, driving prices up. It’s likely that 2021 will be more in-line with 2019 market conditions, giving buyers the opportunity to stop and look without the added pressure.
Move-up homebuyers drove demand for luxury homes in St. John’s, typically prices from $650,000 and up. There was a greater demand for high-end homes in 2020 compared to past years, with many luxury properties selling the same day with multiple offers over asking price. This level of activity hasn’t been seen in St. John’s since before 2014, when the market began a steady decline, with average prices dropping 11% since 2014.
The St. John’s condominium market experienced a small “boom” in 2020. While there is not a large inventory of condos in the area, a number of condos did sell in a short period of time, indicating demand. In addition, there was a greater number of higher-end condos that sold in 2020 compared to 2019. It’s expected that retirees will continue to propel the condo segment forward in 2021.
Looking ahead, affordability will have the greatest impact on St. John’s real estate in 2021. It is unknown what the new year has in store and how the pandemic and its impacts will play out, so homebuyers are likely to be a bit more conscientious with regards to pricing.
Canadian housing market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”