CMHC Reports St. John’s Area February Housing Starts

March 9, 2010 · Filed Under CMHC Reports · Comment 

ST. JOHN’S, March 8, 2010 – Urban housing starts increased during the month of February, according to preliminary released today by Canada Mortgage and Housing Corporation (CMHC). February’s housing starts totaled 68 throughout the St. John’s area versus 45 starts in February of 2009. There were no additional starts recorded outside the St. John’s area. “February’s brisk residential construction activity was attributed to a combination of continued demand and an unseasonably mild winter month,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Local economic and demographic conditions continue to support new home construction throughout the St. John’s region and the first two months of 2010 indicate a solid start to the year,” added Janes.

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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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St. John’s Remax Upper End Report

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

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.

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New home construction economic clause

February 20, 2008 · Filed Under New Home Construction and St. John's Real Estate · Comment 

There has been quite a debate around the “real estate water cooler” in recent weeks.  Towards the end of 2007  some local builders and subdivisions in St. John’s implemented a new “Economic Clause” to their contracts.  Buyers have been noted to shy away from certain subdivisions and proceed to others that do not insert this clause.  The debate is over whether this clause protects the buyer or the builder.   Does it protect the buyer from an increase in purchase price of the house?  Does it allow the builder the option to raise the price of the house prior to starting construction?

The clause states:

“This Agreement of Purchase and Sale is subject to the Vendor confirming to the Purchaser or the Purchaser’s Agent in writing the final sale price on or before the expiry of 14 days prior to excavation of the dwelling. If no written confirmation of the final sale price is issued by the Vendor on or before the expiry of 14 days prior to excavation of the dwelling the Purchase Price referenced herein before shall be deemed to be the final sale price. If written notification of an increase in the final sale price is issued with which the Purchaser is not satisfied then this Agreement of Purchase and Sale shall be void and of no effect. Upon receipt of the written notice of the increased final sale price from the Vendor the Purchaser must acknowledge in writing within 72 hours their agreement with the increase in price, and failure to do so renders this Agreement of Purchase and Sale void and of no effect with the Vendor returning the Purchasers Deposit or down payment.”

What are your thoughts on this clause? Are you in favor of the builder being protected or the buyer?

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Why the delay in New Home Construction in Newfoundland and Labrador?

January 23, 2008 · Filed Under First Time Buyers, Market Trends, New Home Construction, Real Estate Articles and St. John's Real Estate · Comment 

While new home construction in Newfoundland and Labrador is booming, it is not uncommon now to see a six month closing date on new home construction. With a good percentage of the trades people presently working in Western Canada, some contractors are finding it difficult to recruit enough local trades people.

It is estimated that as much as10,000 Newfoundlanders and Labradorians are working out west for companies such as Syncrude, Suncor and Flint Energy, to name a few.

An estimated 4,000 are working on a rotational basis commuting to and from the province, bringing millions of dollars to local communities throughout Newfoundland and Labrador. Some of these commuters are staying in camps, where food, lodging and travel to and from the province are all fully paid.

Workers are drawn to jobs that often start above $100,000 per year and lots of overtime.

While it all may seem wonderful, it has to be a burden on the family structure with 20 days away and back home for 8 days of rest in a repeat cycle.

Can it last? What kind of wages would be required to keep at least some of our trades people home, and what affect will this have on the price of new construction?

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