St. John’s Real Estate Market Posts Strong First Quarter in 2010

May 17, 2010 · Filed Under CMHC Reports, Market Trends and St. John's Real Estate · Comment 

Historically low mortgage rates, combined with strong economic and demographic trends, buoyed local demand for housing in the first quarter of this year.  January to March housing starts posted record results, while existing home sales and prices both continued to advance.

Overall, the St. John’s real estate market was supported by growth in  employment,  income and population, healthy consumer spending and on-going economic momentum spurred by the local oil sector.

Residential construction activity posted record results during the January to March period, due in part to an unseasonably mild winter.  New home prices also advanced in line with  the general market trend.  First quarter housing starts activity increased 15 per cent, with 246 starts versus 214 in 2009’s first quarter.  Single-detached starts increased by 23 units  or 20 per cent, with 199 starts recorded versus 166 during the first three months of last year.

The multiple starts segment was flat, with 47 starts during the quarter compared to 48 a year ago.  The only sub-market which reported increased construction activity was the St. John’s City submarket during the January to March period (104 starts compared to 88 a year ago), with Mount Pearl posting 15 starts versus 17 during 2009’s first quarter and Paradise recording 62 versus 65 a year ago.  Conception Bay South (CBS) recorded 22 starts in the first quarter, consistent with 2009’s first quarter while starts in Torbay remained flat after this first quarter with 14. In the remainder of the CMA, starts increased from eight in the first three months of 2009 to 29 this year.

Price growth continued, with the average new house price increasing in all submarkets. In fact, the average price of a new home surpassed the $325,000 mark in St. John’s City and the $350,000 mark in Torbay. Average sales price ($354,333) and average sales growth (26.4 per cent) were highest in the Torbay submarket of the St. John’s CMA. The average new single-detached house price for the overall St. John’s CMA increased nearly 20 per cent to a record $311,638 compared to $259,990 during the first quarter of 2009. CBS  posted the lowest average new house price of $248,328 during the quarter. Paradise had the second highest rate of new house price growth in the first quarter at 25.1 per cent to  $333,388.

Throughout the St. John’s area, approximately 47 per cent of all new construction activity fell within the $300,000 plus range during the quarter.  The largest growth in market share occurred in the $400,000+ segment.  Overall, new home price growth remained brisk throughout the quarter.

SOURCE: CMHC Housing Now St. John’s CMA

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Newfoundland Labrador 2010 Budget Highlights

March 29, 2010 · Filed Under Newfoundland Economy, Newfoundland Oil and Gas and St. John's General · Comment 

Economic Performance 2009

    • Real GDP declined 8.9%.
    • Employment fell by 2.5% and the unemployment rate increased to 15.5%.
    • Retail sales grew by 2.6% – the strongest performance in the country, with Newfoundland and Labrador being one of only two provinces to record sales growth.
    • Labour income increased by 4.2% – the second best performance among provinces.
    • Housing starts of 3,057; the second highest in 20 years.
    • Capital investment growth ranked fourth among provinces.
    • Personal income growth of 3.9% and disposable income growth of 4.7%.
    • Population of 508,925 as of July 1, 2009, an increase of 0.5% and the largest percentage increase since 1983.
    • Non-resident travel and tourism visitors increased 0.7% to 483,200 with expenditure growth of 1.4% to $375 million.
  • 2010 Economic Outlook
    • Real GDP forecast growth of 4.0%.
    • Employment growth of 2.3% to 219,900.
    • Unemployment rate forecast to decline 0.6 percentage points to 14.9%.
    • Personal income and disposable income growth of 3.9% and 3.3% respectively, aided by wage gains and employment growth.
    • Retail sales growth of 5.0%.
    • Increase in population of 0.5% due to positive net migration.
    • Capital investment expected to increase by 23.0% to $6.2 billion.
    • Housing starts expected to increase 1.5% to 3,102. Residential construction spending of $1.6 billion, an increase of 3.5%.
    • Value of mineral shipments expected to increase about 60%, to $3.1 billion.
    • Total overnight tourist visits expected to increase by 1.3%.

2010 Investments in Infrastructure

Funding for the Conception Bay South Bypass extension, Team Gushue Highway extension and completion of the Torbay Bypass;

2010 Investments in Diversification

More than $126 million in funding for initiatives under the Departments of Finance, Business and Innovation, Trade and Rural Development including:

  • $61 million in tax credits and incentives;
  • $11 million in the Regional/Sectoral Diversification Fund;
  • $2 million in the Aerospace and Defence Development Fund;
  • $1 million for the Innovation Enhancement Fund plus $1 million in the Commercialization Fund, both under the Innovation Strategy;
  • $1 million in the Oil and Gas Manufacturing and Services Export Development Fund as part of a two-year $3 million commitment;
  • $4.9 million under the five-year Oceans of Opportunity Strategy to advance the ocean technology sector; and
  • Other programs including the Small and Medium-sized Enterprise Fund, the Business Attraction Fund, and the Business and Market Development Program.

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2009 Urban Housing Starts in Newfoundland and Labrador

January 11, 2010 · Filed Under CMHC Reports, Market Trends, New Home Construction and St. John's Real Estate · Comment 

ST. JOHN’S, January 11, 2010 – Urban housing starts posted consistent results during the month of December, according to preliminary released today by Canada Mortgage and Housing Corporation (CMHC). December’s housing starts totaled 201 throughout the St. John’s area versus 202 starts in December of 2008. An additional 22 starts were recorded in other urban areas across the province, for a total of 223 provincial starts compared to 226 the previous December. For 2009, urban housing starts totaled 1,703 in the St. John’s area and 2,022 provincially.

“The local residential construction industry remained buoyant throughout 2009 and ended the year off just nine per cent compared to 2008’s record pace,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Despite weakness in the global economy in 2009, positive local economic and demographic factors continued to support stable residential construction activity within the St. John’s region, as well as in other urban centres across the province,” added Janes.
For Canada’s urban centres, total housing starts increased 17 per cent with 12,262 recorded in December compared to 10,488 during December of 2008. Single-detached starts increased 44 per cent to 6,222, while multiple starts of 6,040 represent a two per cent decline from a year ago. Throughout Atlantic Canada, there were 672 urban housing starts posted versus 574 the previous December, an increase of 17 per cent.

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St. John’s Area November Housing Starts

December 10, 2009 · Filed Under St. John's Real Estate · Comment 

St. John’s Area November Housing Starts

Urban housing starts held steady during the month of November, according to preliminary data released today by Canada Mortgage an Housing Corporation (CMHC). November’s housing starts totaled 176 throughout the St. John’s area versus 173 starts in November of 2008. An additional 12 starts were recorded in other urban areas across the province, for a total of 188 provincial starts compared to 196 the previous November. “St. John’s area housing starts held steady relative to last November, posting a small increase of two per cent, with year-to-date starts off ten per cent compared to 2008’s accelerated pace,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Employment, income and population growth continues to support residential construction activity throughout the St. John’s region,” added Janes.

For Canada’s urban centres, total housing starts were flat with 13,507 recorded in November compared to 13,500 during November of 2008.  Single-detached starts increased 15 per cent to 6,671, while multiple starts of 6,836 represent an 11 per cent decline from a year ago.  Throughout Atlantic Canada, there were 641 urban housing starts posted versus 734 the previous November, a decline of 13 per cent.

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St. John’s Area August Housing Starts – Press Release from CMHC

September 10, 2009 · Filed Under CMHC Reports, Market Trends and St. John's Real Estate · Comment 

Urban housing starts decreased during the month of August, according to preliminary data released today by Canada Mortgage and Housing Corporation (CMHC). August’s housing starts totaled 151 throughout the St. John’s real estate area versus 249 starts in August of 2008. An additional 18 starts were recorded in other urban areas across the province, for a total of 169 provincial starts compared to 316 the previous August. For the January to August 2009 period, the St. John’s area posted 1,026 housing starts versus 1,079 starts during the same period last year, while provincial starts totaled 1,180 compared to 1,312 a year ago.

“Despite August’s decline, the local residential construction sector has posted solid year to date results,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Employment and population growth throughout the St. John’s area this year continues to bode well for residential construction activity,” added Janes.

For Canada’s urban centres, total housing starts fell 27 per cent with 12,187 recorded in August compared to 16,807 during August of 2008. Single-detached starts decreased 26 per cent to 5,211, while multiple starts of 6,976 represent a 28 per cent decline from a year ago. Throughout Atlantic Canada, there were 835 urban housing starts posted versus 879 the previous August, a decline of 5 per cent.

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St. John’s Housing Starts increase in First Quarter

April 12, 2009 · Filed Under St. John's Real Estate · Comment 

CMHC just released the following report on housing starts in St. John’s.

Urban housing starts were positive during the first quarter of 2009, despite retreating slightly during the month of March, according to preliminary released today by Canada Mortgage and Housing Corporation (CMHC). Housing starts totaled 214 throughout the St. John’s area during the first quarter compared to 172 starts during the same period last year. For the month of March, there were 45 starts compared to 55 during March of 2008. With 224 total starts recorded province-wide versus 176 a year ago, Newfoundland and Labrador was the only province in Canada with positive first quarter results.

“Despite retreating slightly during the month of March, urban housing starts posted solid results during the first quarter of this year, increasing 24 per cent over the same threemonth period in 2008,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “The local economy remains stable and continues to support housing market activity,” added Janes.

For Canada’s urban centres, total housing starts fell 45 per cent with 8,629 recorded in March compared to 15,616 during March of 2008. Single-detached starts decreased 46 per cent to 2,566, while multiple starts of 6,063 represent a 44 per cent decline from a year ago. Throughout Atlantic Canada, there were 244 urban housing starts posted
versus 522 the previous March.

New home construction in Canada is slowing to more sustainable levels and starts are forecast to come in at 160,250 units, within a range of 141,000 to 180,000 units in 2009. These trends are reflected in the year-to-date actual starts. These decreases, however, should be viewed in the context that housing starts have been exceptionally strong over
the past 7 years, exceeding 200,000 units per year.

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Economy 2009: Newfoundland Real Estate Section

March 26, 2009 · Filed Under Newfoundland Economy and St. John's General · Comment 

The budget was outlined today for spending in Newfoundland and Labrador. $6.7 billion in spending to be exact. Here is a link to the Newfoundland Labrador budget highlights, Building on our Strong Foundation

On the real estate front, the Newfoundland Government released their take on Newfoundland housing market conditions. While most of their data is from CREA and previously discussed earlier on this blog, I thought it important to “cut and paste” the PDF of the real estate section from the Economic Research and Analysis website as it recapped and touched on a number of important areas and facts.

Housing market conditions were robust in 2008. Housing starts increased to a level not seen since the early 1990s. Residential sales activity and prices reached record levels. Other capacity indicators like rental vacancy rates are at, or remain near, historical lows. Increased housing demand stemmed from strong economic performance, low interest rates, optimism about future major projects, and household formation.

Housing Starts

During 2008, housing starts totalled 3,261 units, up 23.1% compared to 2007. This was in contrast to activity in the Maritimes and Canada, where starts declined by 7.9% and 7.6%, respectively. While urban areas account for approximately two thirds of housing starts in the province, both urban and rural areas recorded significant gains in 2008. Urban housing starts were up 22.1% to 2,229 units and rural starts were up 25.2% to 1,032 units. Total housing starts are expected to fall to 2,648 units in 2009 as the global recession and slumping housing market in the rest of Canada weakens local consumer confidence. Since 1989, housing starts have averaged 2,333 units per year. Therefore, even with the decline expected this year, housing starts will be at relatively high levels for the local industry.

Residential Sales and Prices

Residential sales activity and prices increased to record levels last year. The number of residential properties sold in the province through the Canadian Real Estate Association’s Multiple Listing Service® (MLS®) during 2008 was 4,695, an increase of 5.0% from 4,471 in 2007.  This performance was in contrast to the national residential market. MLS® sales decreased by 17.1% in Canada and 8.9% in the Maritime provinces during 2008. According to CREA, the number of MLS® sales in the province is expected to decline by 14.8% in 2009 to 4,000.
Strong demand for housing, especially during the summer months, created a buying frenzy in 2008. The average number of active MLS® listings in the province (a measure of housing availability/supply) declined by 38.3% to 1,495 from 2,423 in 2007. Homes were being purchased as soon as they hit the market and sellers were receiving multiple offers — sometimes well above the asking price. As a result of increased demand, housing prices increased. During 2008, the average MLS® residential price was $178,477, an increase of 19.6% compared to 2007. The fourth quarter average MLS® residential price surged 27.2% over the fourth quarter in 2007, representing the only growth market in Canada.
Increased housing demand in recent years is the result of employment and income growth; household formation; low mortgage rates; and a positive business environment, facilitated in part by continued optimism surrounding a number of future major projects. In addition to these factors, industry indicated that demand for residential units was also being fuelled by expatriates living in other provinces and from residents who commute to other provinces for work purchasing property for personal use and/or investment purposes.

Rental Market
Rental vacancy rates are at or near historical lows throughout Newfoundland and Labrador. Vacancy rates in urban areas have decreased from a high of 15.4% in 1997 to just 1.1% in 2008. During 2008, vacancy rates were lowest in the St. John’s CMA (0.8%) and Corner Brook CA (0.9%), followed by Grand Falls-Windsor CA (1.9%), Gander (2.6%), and Bay Roberts CA (4.0%). Although vacancy rates are low, rental prices remain the lowest in Atlantic Canada. In 2008, the average rent for a 2-bedroom apartment in Newfoundland and Labrador was $596 compared to $635 in New Brunswick, $660 in Prince Edward Island, and $795 in Nova Scotia. It is expected that improved labour markets, positive netmigration, higher housing prices, and a lack of new rental construction will keep vacancy rates low and place upward pressure on rental prices.

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