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.

The tone for the report is caution throughout most sectors including labour, housing, exports and Canadian dollar.

Saskatchewan is expected to be the growth leader in 2008 as its economy benefits from strength in energy, mining, and agriculture. Newfoundland is expected to be the laggard as waning oil production weighs on its growth.

Housing affordability is poised to improve across the country this year on the back of falling mortgage rates and cooler house price gains. House price growth is expected to move into the single-digit range in almost every province by year-end. This contradicts Remax’s 2008 house price increase for St. John’s but is in line with CMHC’s report.

Saskatchewan will continue to benefit from last year’s in-migration surge in 2008 before housing activity simmers down in 2009. Every province except Saskatchewan is likely to see a decline in new home construction in 2008.

Saskatchewan — The new provincial growth leader
We expect Saskatchewan to be Canada’s top growth performer this year, coming in at 3.6% in 2008 and 3.2% in 2009. Saskatchewan and Manitoba have become the new ‘it’ provinces with hot housing markets, big capital spending plans and tight labour conditions. Saskatchewan now ranks number-one across all key housing indicators that we track. House prices became overvalued in a very short time and it is likely only a matter of months before a decelerating trend sets in to bring markets back closer in line with underlying fundamentals. The cool down is likely to be similar to what is currently going on in Alberta. On the business side, however, Saskatchewan has more upside potential than Alberta. Saskatchewan benefits from strong export volumes and high prices for oil, uranium, potash and grains. A surge in migration inflows confirm that these strengths are being noticed. The unemployment rate (4%) is holding at its lowest rate in 25 years and skilled labour shortages are a growing concern. Labour shortages are supporting the fastest wage growth in the country.

Newfoundland and Labrador — Waning oil production
Newfoundland topped the growth charts last year — growth is expected to have come in at about 9% — but is set to slip to last place in 2008 as oil production declines. Offshore oil production is expected to drop 15% in 2008 as all three oil producing fields face falling production volumes. Prospects for expansions at existing oilfields leave the door open for upside potential in the early part of the next decade. Potential projects include the Hebron development, the Hibernia Southern Extension and an expansion at White Rose. The province’s mining sector (mostly made up of nickel and iron ore) is offsetting some of the weakness on the oil front. Iron ore prices have soared by 66% since 2007 and are expected to keep the value of shipments at an elevated $4 billion in 2008 for a second consecutive year.

7. Scenery – View Newfoundland’s spectacular coastlines, panoramic views, icebergs, whales and provincial parks.

6. Affordable Housing – Average real estate price for in St. John’s is lower then most cities in Canada. We are seeing more and more emails from people in Vancouver, Calgary and Toronto looking to relocate back to Newfoundland or looking to invest in Newfoundland.

5. Quality of living – Enjoy a high standard of living, low population, great schools, little traffic, fresh clean air and genuine Newfoundland hospitality.

4. Proximity – Your commute to and from work, schools and amenities is VERY short. You can drive from East End St. John’s to West End in about 15mins. With the Outer Ring Road, commute time from Paradise and CBS has been reduced significantly.

3. Nightlife – There is always something to do in the evenings. Plays, theater, beautiful restaurants and live music at most George Street bars.

2. Outdoor Activities – There are lots of winter sports (skiing, ice fishing, skating, snowboarding, ice hockey, snowmobiling, etc.) and endless summer activities (golfing, baseball, soccer, swimming, jogging, sea kayaking, rowing etc.). Hike or camp the trails in provincial parks or the East Coast Trail. Hunt moose, rabbit, caribou or pick blueberries. There is something here for everyone.

1. The next few years are looking very promising for Newfoundland. There is a lot of hype on our oil and gas industry. Hebron, White Rose, Hibernia, and the Terra Nova Project, all major contributors to the Newfoundland Economy. This combined with the low cost of living makes St. John’s an attractive city to relocate.

Allow Fraser and Stephen Winters to assist you when relocating to St. John’s or surrounding areas. Email us for a relocation package.

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.

Oil and Gas Week

Newfoundland and Labrador’s offshore oil and gas industry currently has three producing offshore oil projects: Hibernia, Terra Nova, White Rose.