The east coast of Canada has seen many of its real estate markets heating up rapidly, and sitting at a boiling point for the last year and a half. Driven by the pandemic and the surge in inter-provincial migration, houses across Atlantic Canada have been flying off the market at a blistering pace. The Newfoundland & Labrador housing market is one to watch as 2021 comes to a close. New sales records are being set and most market metrics are off the charts. Here are the most recent figures emerging from the red-hot Newfoundland and Labrador real estate market.
A Strong October for Newfoundland & Labrador Housing Market
Starting the last quarter of 2021 on a high note, the Multiple Listing Service System of the Newfoundland and Labrador Association of REALTORS® recorded 657 homes sold during the month of October. This is both a year-over-year increase of 10.2 per cent and a new sales record for the month of October. In addition, October home sales were also 32 per cent above the five-year average and 38.8 per cent ahead of the 10-year average for the month of October.
When tallying sales for the year thus far, Newfoundland and Labrador has set yet another record with 5,662 units changing hands over the first 10 months of the year – another outstanding increase of 52.4 per cent compared to the first 10 months of 2020. In particular, the city of St. John’s saw sales activity increase 8.2 per cent during the month of October compared to that of 2020. While significant, this is hovering below the levels recorded in the rest of the province, which experienced an increase of 11.6 per cent.
As demand continues to rise in the province, the average price of homes has followed suit. In fact, the Multiple Listing Service Home Price Index (HPI) composite benchmark price at the end of October 2021 was up 10.1 per cent year-over-year, at $322,100. It’s prices like these across the province that are drawing in buyers from other regions nationwide, where the benchmark prices are more than double – making living on the east coast that much more desirable.
Single-family homes in the province saw a benchmark price of $325,300 in October. The benchmark price for townhouse/row units was $275,400, and the benchmark price for apartments was $238,800. These figures represent year-over-year increases of 10.3 per cent, 8.3 per cent and 3.2 per cent, respectively.
The province’s largest city, St. John’s, had an MLS HPI composite benchmark price of $291,500 in October 2021, an increase of 7.7 per cent year-over-year. Zooming in on the city, the benchmark price for a single-family home in St. John’s was $295,800 – eight per cent higher than last year. Townhouse/row units had a benchmark price of $279,800 and the benchmark price for apartment-style condos was $239,000. Each property type in the city experienced price increases over the last 12 months. It is worth noting that only townhouse/row units in St. John’s were higher than the provincial average.
Much of this price increase can be attributed to the low interest rates and the lack of inventory; factors that have been driving the affordability crisis that has been crippling local markets from coast to coast. The month of October recorded a dollar value of home sales of $181.4 million, which is 18.5 per cent higher than last October, setting a new record for the month.
In terms of inventory, the number of new listings in the east coast province was down 9.4 per cent on a year-over-year basis with just 749 new residential listings added during the month. This is the lowest number of new listings on the market during the month of October in more than five years; it is also 10.3 per cent below the five-year average and 9.3 per cent below the 10-year average for the month.
With inventory not coming on stream at a fast enough rate, and high demand continuing to drive sales, active residential listings have declined sharply to the tune of 22.5 per cent compared to the end of October 2020. This past month, active residential listings numbered 3,636 units for the province which is the lowest for the month of October in more than five years. This is also 24.7 per cent and 20.2 per cent below the five- and 10-year averages for active listings in October.
Will These Trends Continue into 2022?
It is largely anticipated that the Newfoundland & Labrador housing market will remain strong. With interest rates sitting low and out-of-province buyers still drawn to life on the east coast, sales are expected to remain fairly strong, which should continue to fuel the flames of an already hot market. For now, local buyers in the Newfoundland and Labrador housing market may have to adopt a wait and see approach as we keep our eyes and ears peeled for signs of more balanced conditions to come.