The St. John’s, Newfoundland housing market has made price and sales gains in 2021, with seller’s market conditions expected to continue through the end of the year. This largely echoes activity in the rest of Canada, where seller’s market conditions have been identified in 26 of 30 regions analyzed in the RE/MAX Fall 2021 Housing Market Outlook Report.
Single-detached homes saw the greatest increase in prices, up 8.4% YoY (from $343,070 in 2020 to $371,970 in 2021). Townhomes rose 2.8%, from $247,432 in 2020 to $254,462 in 2021. Condominiums were the only property segment to see a decline in average price, down 1.9% YoY, from $261,425 in 2020 to $256,415 in 2021.
However, sales in the region have been brisk across all property types, with detached-home sales up 60.4% YoY, condominium sales up 75.7%, and townhome sales up 94.1%. The most common type of property purchased in 2021 was single-detached houses, a trend that is expected to continue through the remainder of the year.
It is anticipated that detached homes in the St. John’s housing market will experience a price increase of 1% in the remaining months of 2021, while condominium and townhome prices will hold steady.
According to Teri-Lynn Jones and Jim Burton, owners of RE/MAX Infinity Realty, “come from aways,” either originally from Newfoundland and Labrador or with a connection to the region, continue to fuel segments of the St. John’s housing market and surrounding areas, along with a combination of retirees, and families who have the ability to work from home.
Month-over-month listing inventory and average days on market (DOM) have been on the decline. “For nearly 30 months, we have seen a decrease in inventory, however COVID-19 has changed other factors of our market, such as demand for listing inventory and a spike in multiple offers, particularly on properties that are move-in ready,” according to Jones and Burton. “We expect these conditions to remain steady for the fall and winter of 2022.”
Quality inventory is a concern in the St. John’s, and is not expected to increase this fall. Low interest rates, low inventory levels and good demand for resale product will keep this local Newfoundland housing market in seller’s territory through the fall and winter.
Low housing inventory is impacting the rental market, as buyers wait for the right opportunity in the face of the supply shortage. Rental inventory is extremely low with landlords reporting up to 100 inquires on new rental units coming to the market. Students attending College of the North Atlantic and Memorial University are putting pressure on the rental market, along with retirees/downsizers relocating to the greater St. John’s area from rural Newfoundland & Labrador.
Jones and Burton report an increase in first-time homebuyers, though some have not been able to successfully purchase. Those hopeful homebuyers continue to rent while they wait for the right opportunity to buy. Millennials are leading the charge, seeking properties priced from $250,000 to $400,000.
A slight modification to the historically low interest rates is expected in the coming months. Pre-approved homebuyers may choose to purchaser sooner to capitalize on the lower interest rate, while they still can.
St. John’s luxury home market has also experienced a boost in activity by buyers looking to relocate from more densely populated areas of Canada. Newfoundland & Labrador has among the most attractively priced luxury properties nationally on the market. 2021 seen some great news for the provincial economy with the sale of Verafin (600+ employees in St. John’s) for $2.75US Billion. Dozens of employees benefited and have entered the real estate market. Higher priced oil (some say $100 per barrel before 2022) will add to the life and success of NL’s economy, helping increase the GDP and perhaps see more buyers related to the oil industry moving to NL in 2022/2023.
From a broader Atlantic Canada perspective, housing market activity remained persistent YoY, with Halifax and Moncton seeing significant price increases across all property types. Single-detached homes in Halifax rose 24.3% YoY, from $402,484 to $500,147. Meanwhile, Moncton detached home prices gained 21.2% YoY, from $233,676 to $282,886. The condo and townhome segments in Halifax, Saint John and Moncton all saw prices surge between 12.5% and 48.9% YoY.
Moncton in particular is expected to continue strong, with one of the highest price outlooks for the remainder of 2021, between 12% and 15%. Saint John is expected to see more-tempered price growth, ranging between 1% and 3% across all property types, while Halifax could see a 6% increase in average sale price for the remainder of the year.
National Canadian Housing Market Trends
Conditions in the Halifax housing market are echoed across the rest of the country, with single-family homes seeing the most pronounced price increases year-over-year in 2021, rising between 6.8 and 27.3 per cent across 26 or 29 markets surveyed in the report. And much like Toronto real estate, activity in this property segment is being propelled by strong demand by young families, a trend that RE/MAX brokers and agents expect to continue through the fall.
The average residential price in Canada, across all housing types, is anticipated to increase 5% in the remaining months of 2021.
“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”
Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”