St. John’s Remax Upper End Report

September 26, 2008 · Filed Under Market Trends, Newfoundland Oil and Gas, Remax Reports, St. John's Real Estate · Comments Off 

Strong economic performance is fueling sales of luxury homes priced in excess of $400,000 in St. John’s this year. Year-to-date MLS reported sales over $400,000 have climbed 78 per cent, reaching 50 units in the first seven months of 2008, compared to 28 at the same time in 2007. The increase in sales activity of luxury homes extends much further than the MLS statistics reveal considering the present record volume of new executive home construction.

Under the leadership of Premier Danny Williams, Newfoundland has flourished.  Strength in the energy sector has bolstered the local economy and residential housing sales.  Unemployment is at a record low and wages continue to rise. The average price of a home has increased significantly, prompting unprecedented move-up activity.  Sales are up across the board with price points climbing in more and more communities. Once a rarity in Newfoundland, homes sales are now beginning to occur over $1 million.

Although a considerable amount of new home construction exists in St. John’s, demand for new homes continues to outpace supply.  A shortage of skilled trades is the trouble point within the marketplace, as many skilled trades people have migrated to Alberta for work in recent years. This factor burdens the ability to satisfy the demand for new homes. The construction period for production of an average single family dwelling that would typically require a five to six-month schedule is now taking double the amount of time to complete.

Inventory levels are up in the $400,000 plus price range, but quality listings are few and far between with a shortage in key luxury neighbourhoods.  Sought-after locations in St. John’s and surrounding areas include Churchill Square, King William Estates, Waterford Valley, Country Gardens, Hogan’s Pond, and specific regions within the communities of Topsail and Manuels, where properties are priced from $500,000 to $2 million.

Luxury homes priced at fair market value tend to sell within 30 days, while excessive overpriced listings stagnate. Well-priced properties in coveted neighbourhoods are experiencing multiple offers.

The majority of buyers are young professionals in their late 30s and 40s. Many are employed by the oil and gas industry, or hold high-paying jobs in business, engineering, and medicine. Transfers from out-of-province and international buyers represent a significant presence at the top-end of the market, with many investing in established neighbourhoods, the urban core, and ocean view or pond frontage properties.

Price appreciation has experienced a huge jump in recent years with values up as much as 35 per cent over the last two years in the luxury market.  The majority of upper-end sales occur at the $500,000 to $900,000 price points.  Currently, the highest priced residential listing is $1,475,000.

The offshore development of Hebron, Newfoundland’s fourth oil field, located just 350 kilometers from St. John’s, is forecast to further impact the local economy.  In the foreseeable future, the province is expected to receive significant royalties from offshore oil activity.  The revenues will help diminish the highest per-capita debt in the country and secure Newfoundland’s economic outlook and that of the residential real estate market.
Leading the country in terms of percentage increase in luxury home sales are Regina (up 306 per cent); Winnipeg (up 89 per cent); St. John’s (up 78 per cent); Saskatoon (up 72 per cent); Kitchener-Waterloo (up 47 per cent); Ottawa (up 36 per cent); Halifax-Dartmouth (up 20 per cent); London (up 14 per cent); Greater Vancouver (up five per cent); and Victoria (up four per cent). Solid performance is likely a result of consumer confidence, particularly in provinces like Saskatchewan, Manitoba, Newfoundland, Nova Scotia, and parts of Ontario where solid economic fundamentals helped to bolster the number of homes sold in the upper-end.

Hebron is a go for Newfoundland

August 20, 2008 · Filed Under St. John's Real Estate · Comments Off 

Worth potentially 20 billion dollars to Newfoundland over the next 20 years and over 3000 jobs to be had.  Today Danny Williams unveiled the Hebron deal in a live news conference at the Fairmont Hotel in St. John’s. Start of construction is aimed for 2012 with oil projected to flow in 2017.

Herbon Announcement Set for Tomorrow

The day has finally arrived. All newspapers and local websites are anticipating a formal announcement tomorrow from Premier Danny Williams giving the thumbs up for Hebron. Good timing seeing that the deadline for the agreement was slated to expire on Thursday.

The breakdown in ownership is Chevron Corp. which owns 28 per cent, Exxon Mobil Corp. the largest shareholder with 37.5 per cent, Petro-Canada and Norway’s state-owned StatoilHydro ASA own the rest. The province of Newfoundland will receive a 4.9 per cent equity stake in the project.

So far this year St. John’s Real Estate has jumped about 20% with a projected 15% increase in 2009. In the beginning of the year CHMC went on record saying 7 – 8% increase in housing prices while Remax was deemed highly optimistic with their 12% projection for 2008.

With this impending news release, how will the real estate market react? When will the oil companies start moving people into the St. John’s and start buying up properties? Is too much of a good thing too fast good for Newfoundland Real Estate?

Remax Atlantic Canada Market Trends

May 27, 2008 · Filed Under First Time Buyers, Market Trends, Remax Reports, St. John's Real Estate · Comments Off 

An economic engine firing on all cylinders has driven residential real estate activity in Newfoundland and Labrador to new heights. Home sales in the first quarter of 2008 climbed just over 14 per cent, rising from 624 units—and a buyer’s market—one year ago, to 713 units, and a seller’s market. Average price followed suit, with year-to-date values rising close to 14 per cent to $156,953, up from $138,167 in 2007. The momentum is even greater in St. John’s, where average price now approaches $190,000. Not since a very short-lived period in 2004 has the city seen the level of consumer confidence that exists in the marketplace today.

Fueled by export growth—in the form of crude oil—Newfoundland-Labrador’s GDP growth led the country in 2007 at a substantial 13.4 per cent. Newfoundland- Labrador has reported the largest single-decade turnaround in GDP per capita in one decade—a first in Canadian history. Out-migration has been stemmed and population growth is expected for the first time in 15 years. Premier Danny Williams has promised that the province will be a “have” within the next 11 months.

Prosperity has fueled a spending spree that includes housing, retail, and auto sales. Inventory levels are tight and multiple offers are commonplace on homes across the board.

First-time buyers are entering the market en masse, taking advantage of zero and low down payment plans and longer amortization periods. Equity gains have also played a role, prompting serious move-up activity. Home sales priced in excess of $350,000 are brisk.

Investment is a growing segment of the real estate market, spurred by purchasers from Western Canada. Lower interest rates are expected to stimulate even greater activity in the marketplace.

There are $10 billion in capital works projects on the table and the pressure is only starting to build. Natural resources are the key to success and the future has never looked brighter for St. John’s. Real estate will following lock-step, with sales and prices exceeding 2007 levels by double-digits at year-end 2008.

Read the full Remax Atlantic Canada Martket Trends Report 2008

Newfoundland in the Spotlight once again

April 25, 2008 · Filed Under St. John's Real Estate · Comments Off 

Reporter Greg Quinn wrote and article for Bloomberg entitled “Newfoundland Gets Off Canada’s Dole as Williams Takes on Exxondiscussing 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.

7 Reasons to Invest in Newfoundland Real Estate

March 2, 2008 · Filed Under Newfoundland Top 7 · 4 Comments 

The Top 7 Reasons to Invest in Newfoundland Real Estate are:

7. Average price for a home in Newfoundland is MUCH lower then the Canadian average house price. A 2-apt home for $200,000 can fetch you an extra $1600 a month cash flow (before expenses and mortgage)

6. The next few years are looking promising for the real estate market. Remax is predicting a 12% increase in housing prices for 2008.

5. Oil and Gas – Hebron, White Rose, Hibernia, Terra Nova Project, all major contributors to the Newfoundland Economy.

4. The cost of living in Newfoundland is lower per person/family then other provinces in Canada.

3. Danny Williams. Whether you like him or not, the “Danny Williams Effect” has certainly placed a positive spin on Newfoundland.

2. View some of the most spectacular images in the world off the coast of Newfoundland and Labrador. Watch whales breach and icebergs float by your reasonable priced ocean front property. Own a little corner of the world you can call your own.

1. Quality of living. Newfoundland being an island has a low crime rate and a high standard of living. Little to no traffic. Plenty of provincial parks and golf courses. Top notch amenities. As well as our genuine Newfoundland hospitality, quick wit, and charm.