St. John’s, Newfoundland Housing Market: RE/MAX Fall 2021 Outlook

The St. John’s, Newfoundland housing market has seen price and sales gains in 2021, with seller market conditions expected to continue through the end of the year. This broadly reflects activity in the rest of Canada, where seller market conditions were identified in 26 of 30 regions analyzed in the RE/MAX Fall 2021 Housing Market Outlook Report.

Single-family houses saw the greatest price increases, increased by 8.4% YoY (from $343,070 in 2020 to $371,970 in 2021). Townhouses up 2.8%, from $247,432 in 2020 to $254,462 in 2021. Condos were the only real estate segment to see a decrease in average price, down 1.9% Year-over-year from $261,425 in 2020 to $256,415 in 2021.

However, sales in the region were brisk across all property types Single family home sales up 60.4% YoY, Condo sales up 75.7%, and Townhouse sales up 94.1%. The most common type of property bought in 2021 has been single-family homes, a trend that is expected to continue through the end of the year.

Single family homes are expected to come at a price in the St. John’s housing market 1% increase in the remaining months of 2021, while prices for condos and townhouses remain stable.

According to Teri-Lynn Jones and Jim Burton, owners of RE/MAX Infinity Realty, “comers from far and wide,” either originally from Newfoundland and Labrador or with a connection to the region, continue to fuel segments of the St. John’s and area housing market together with a combination of retirees and families who have the opportunity to work from home.

Listing inventory and average days on market (DOM) have been declining month-on-month. “For nearly 30 months we’ve been seeing a decline in inventory, but COVID-19 has altered other factors of our market, such as demand for listing inventory and an increase in multiple listings, particularly ready-to-move properties,” according to Jones and Burton. “We expect these conditions to remain stable for the fall and winter of 2022.”

Quality inventory is a problem in St. John’s and is not expected to increase this fall. Low interest rates, low inventories and good demand for resale products will keep this local Newfoundland housing market in sales territory throughout the fall and winter.

Low stock levels are affecting the rental market as buyers wait for the right opportunity given the lack of supply. The rental stock is extremely low with landlords reporting up to 100 inquiries about new rental units coming onto the market. Students attending College of the North Atlantic and Memorial University are putting pressure on the rental market, along with retirees/downsizers moving to the greater St. John’s area from rural Newfoundland and Labrador.

Jones and Burton report a surge in first-time home buyers, although some have not been able to buy successfully. These hopeful homebuyers keep renting while they wait for the right buying opportunity. Millennials are leaders, looking for homes priced between $250,000 and $400,000.

A slight modification of the historically low level of interest rates is expected in the coming months. Pre-approved homebuyers can choose a previous buyer to take advantage of the lower interest rate while they still can.

The luxury home market in St. John has also seen a surge in activity from buyers looking to relocate from more populated areas of Canada. Newfoundland and Labrador is among the most affordable luxury homes on the market nationwide. 2021 saw some great news for the provincial economy with the sale of Verafin (over 600 employees in St. John’s) for $2.75 billion. Dozens of employees have benefited and entered the real estate market. Higher priced oil (some say $100 a barrel before 2022) will add life and prosperity to the NL economy, help boost GDP and perhaps result in more oil industry buyers moving to NL in 2022/2023.

From a broader perspective of Atlantic Canada, housing market activity remained steady year-on-year, with Halifax and Moncton seeing significant price increases across all property types. Single family homes in Halifax are up 24.3% year over year from $402,484 to $500,147. Meanwhile, single-family home prices in Moncton rose 21.2% year-on-year from $233,676 to $282,886. The condominium and townhouse segments in Halifax, Saint John, and Moncton all saw price increases ranging from 12.5% ​​to 48.9% year over year.

Moncton, in particular, is expected to remain strong, with one of the highest price outlooks for the remainder of 2021 ranging from 12% to 15%. Saint John is expected to see more moderate price growth, ranging between 1% and 3% for all property types, while Halifax could see a 6% increase in average selling prices for the remainder of the year.

National Canadian Housing Market Trends

Halifax housing market conditions are mirrored in the rest of the country, with single-family homes posting the strongest year-over-year price increases in 2021, rising between 6.8 and 27.3 percent in 26 or 29 markets surveyed in the report. And similar to Toronto real estate, activity in this real estate segment is being driven by strong demand from young families, a trend RE/MAX brokers and brokers expect to continue into the fall.

The average home price in Canada across all home types is expected to decrease increase 5% in the remaining months of 2021.

“Housing activity has remained strong throughout the pandemic, so it’s not surprising that the outlook remains bullish for the remainder of the year, which is great for homeowners and their equity but challenging for first-time home buyers, which have been.” above market price,” said Elton Ash, executive vice president, RE/MAX Canada. “We must continue to educate Canadians from a practical, real-world standpoint. What is currently affecting the Canadian housing market? Low interest rates, economic stimulus, higher homebuyer budgets, higher savings rates, homeowners too scared to sell and a lack of new construction. These factors have created the current market conditions.”

Alexander adds: “The Canadian housing market has historically provided homeowners with great long-term returns and solid financial security, but there is no doubt that the rapid price increases we have seen of late is a cause for concern. However, there is no reason to panic. The data shows that single-family home price increases are flattening out in some urban centers, but prices continue to rise in many smaller towns and communities that were once havens of affordability. Real estate has been a boon to Canada’s economy during and before the pandemic. We believe in the long-term health of Canada’s housing market, but to protect it we must recognize and address the housing shortage. Our current government needs to stop using band-aids and get to the root of the problem.”