The Newfoundland and Labrador Economy Highlights

• Economic Performance 2007
  • Real GDP increased by 7.9% driven by exports of oil and minerals and consumer and government sector spending.
  • The unemployment rate fell to 13.6%, a reduction of 1.2 percentage points and the lowest rate in 26 years.
  • Personal income growth of 4.3% and personal disposable income growth of 5%.
  • Retail sales growth of 9.5%.
  • Increased residential construction investment of 9.9% with 2,652 housing starts.
  • Net in-migration of almost 2,000 people in last half of 2007.
• 2008 Expectations
  • Real GDP forecast to decline by 2% due to lower offshore oil production.
  • Capital investment expected to increase by 15%. Combined investment in oil and gas projects estimated to be $1 billion for 2008.
  • Housing starts stable at 2,657 for the year.
  • Employment expected to increase by 1.5%, adding another 3,300 jobs, and the unemployment rate is expected to decline to 12.4%, a further decrease of 1.2 percentage points.

Enjoy complete privacy with this large side split home on almost 2 acres of land. 3 bedrooms up and one in the basement. Master bedroom ensuite has stand up shower and jacuzzi tub. Spacious country style eat-in kitchen with 10ft center island and adjacent sun room. Formal dining room. Separate family room with propane fireplace and cathedral ceiling. Ceramic floors and infloor heat through most of main floor and upper level. Plenty of space in the rec room for entertaining or relaxing by the fireplace. Oversize double car garage with lots of room for storage. 28 x 17 PT patio deck. In addition is a huge 2200sqft detached garage plus 1200sqft second floor loft. Great views of Bell Island and Topsail Bluff. Asking Price $699,900.  Contact Fraser or Stephen Winters for more information.  709-682-9245 or 709-682-9045.

Virtual Tour for 109 Ortega Drive

Finance Minister Jim Flaherty has announced changes to Canada’s anti-money laundering legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The changes will have an impact on how real estate transactions are conducted in Canada. New amendments to money laundering legislation are effective on June 23, 2008.

Basically for the general public this means you will have to provide proof of identification when you sit down to purchase a property. Not really much difference from when you open a bank account, purchase a car or purchase insurance or receive a VISA. Need a Passport? Guess what….you need to show birth certificate and another form of identification. Need a marriage license…..same thing. Real Estate was lacking behind in this area. About time the government stepped up in my opinion.

For the Realtor? We have to Identify our clients. Currently, if you have identified an individual before, you do not have to do so again if you recognize the individual. Once the changes come into effect, if you have doubts about the information collected concerning an individual’s previous identification, you will have to identify that individual again.

If the parties in the transaction are each represented by a different real estate broker or sales representative, you will have to identify the individual or confirm the existence of the entity that you represent in the transaction.

If some parties in a real estate transaction are not represented by a real estate broker or sales representative while other parties are, each real estate broker or sales representative who represents a party to the transaction will have to identify or confirm the existence of the parties that are not represented.

To learn more visit FINTRAC’s website at www.fintrac.gc.ca

The 25th Eastern Newfoundland Canadian Home builders Association Annual Home Show will be held May 2nd to 4th at the Mile One Centre. Once again RE/MAX will be headlining the show - this year with a wine tasting event. In order to receive a ticket to the wine tasting you must speak with a RE/MAX Realtor.

Again this year will be the popular Ugliest Patio Contest and Room make over Contest.

Each admission ticket gives you a chance to win a free fishing trip for two to Labrador Salmon Lodge in Forteau, Labrador as well as over $10,000 in door prizes.

25th Annual Home Show
May 2nd - 4th, 2008
Mile One Centre
Presented by RE/MAX

Reporter Greg Quinn wrote and article for Bloomberg entitled “Newfoundland Gets Off Canada’s Dole as Williams Takes on Exxon” discussing Newfoundland’s transformation (”Getting off the dole” Quinn eloquently put it) due to recent oil revenue and our Premier Danny Williams fight with the big oil companies.

Favorable high oil prices, personal income tax cuts, a budget surplus and booming economy - 9 percent growth last year which was three times the national average - seems to be the talk of the town.

Everywhere you turn people are talking about the prosperous times in Newfoundland’s future….most importantly the St. John’s real estate market.

Stated in his article was of course my interest….real estate.

The average price of a detached home in St. John’s jumped 13 percent in the first quarter to C$164,000, according to Royal LePage Real Estate Services. That’s almost double the national price increase.

The province’s economy has grown 50 percent since Hibernia began producing nine years ago. That’s second only to the 53 percent expansion in Alberta, whose tar sands hold the biggest oil deposits outside the Middle East.

Although a recent report pegged St. John’s as one of the most affordable cities in the G7 nations, affordability is a growing concern. Buyers continue to face challenging market conditions, including unprecedented demand and extremely tight inventory levels.

Multiple offers are quite prevalent. It is not uncommon to see quality, new listings generate three to four offers after only a few days on the market, with most selling for more than list price. Bungalows are especially coveted.

Despite a sense of urgency in the marketplace, buyers remain quite determined. Most are willing to compromise by way of necessity, while others ante up more money to compete. Some entry-level purchasers are sitting on the fence, waiting for more product to come on stream with the Spring market and better weather.

Currently, average price in Greater St. John’s hovers at $172,000. Although the St. John’s downtown core has more affordable options, most purchasers prefer Woodlands, Cowan Heights, and Mount Pearl, where three-bedroom, resale homes start from $180,000.

Condominiums are a viable alternative, but this type of product is popular with only a small percentage of first-time buyers. St. John’s Condos can start from $100,000 for a one-bedroom unit in an old military conversion to $130,000 for a two-bedroom in an older building in the northwest end of the city. Duplex product, though limited, is also growing in demand, and more units are coming on stream.

The least expensive sales recorded to date in St. John’s include a detached home with some new upgrades that changed hands for $140,000 and an 800 sq. ft. condo apartment that sold for $95,100 in an older, but renovated, building. Both were located in the city’s east end.

With average prices forecast to experience double-digit momentum yet again this year, it is expected that the first time buyer segment will remain very active as purchasers try to buy in before prices rise further.

While higher housing values and tight inventory levels have hampered home-buying activity so far this year, longer amortization periods and alternative housing types have offset the impact on most major markets across the country, according to a report released today by RE/MAX.

Despite a higher degree of frustration in the marketplace than in previous years, the RE/MAX Affordability Report found that first-time buyers, in particular, remain steadfast in their determination to purchase a home. In fact, entry-level purchasers are adjusting their expectations by sacrificing size, location, and even long-term financial freedom, to overcome challenges such as rising prices and serious supply issues. Innovative financing has become key to homeownership in today’s environment, with longer amortization periods gaining favour in 62 per cent of the major centres surveyed. Low or no down payments were popular with first-time buyers in 38 per cent of markets.