St. John’s Vacancy Rates

February 7, 2008 · Filed Under Market Trends, St. John's Investments and St. John's Real Estate 

Over the previous three years, the St. John’s vacancy rate increased approximately three percentage points, or an average increase of 1.0 percentage point per year. Much of the increase was attributed to record home buying activity and the corresponding movement of renter households to home ownership.

However, this year’s sizeable decline in the vacancy rate is a clear indication that many renter households now deem it more affordable to remain renters rather than buy a home. The average prices in St. John’s have increased (approx $185,000 in January), pushing first time buyers to the sidelines. Although both the resale and new home markets are expected to remain strong next year, the impact of first-time buyers shifting out of rental will be less pronounced than in prior years. The combined effect of these factors should result in the vacancy rate holding steady at the current level of 2.6 per cent in 2008.

However, there is certainly upside risk to the economic forecast and a corresponding decline in the vacancy rate due to an increase in construction activity from Hebron, the Long Harbour Smelter, the Southern Head Placentia Bay refinery and Lower Churchill development.

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