St. John’s Housing Market Outlook (Fall 2020)
The St. John’s housing market has been resilient in the face of difficult circumstances, which have impacted real estate activity since the beginning of the year. Prior to the start of the pandemic, St. John’s and surrounding areas were hit with a massive snowstorm that led to a state of emergency, with businesses shutting down for more than a week. As the state of emergency was lifted at the end of January, St. John’s housing market activity skyrocketed and the high continued until the onset of COVID-19 in mid-March. While the pandemic prompted a market slow-down at the end of March and into April, it was a very different story in May and June, according to the RE/MAX Fall Market Outlook Report, which saw some properties selling in less than a day, with multiple offers and selling prices over asking. The St. John’s housing market has not seen this type of action since 2012. Heading into fall, the market is expected to remain steady, with a 2% increase in average residential sale prices anticipated for the remainder of 2020.
Atlantic Real Estate Market Trends
Other regions across Atlantic Canada that reported low case counts of COVID-19, such as Halifax, Charlottetown and Saint John, also experienced reduced market activity in March, however the Atlantic decline was less pronounced than that experienced by some Ontario and Western Canada markets. Activity in the region returned to pre-COVID-19 levels by May 2020, and like many sellers’ markets in Canada, multiple offer scenarios continue to take place.
Canadian Housing Market Trends
Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.. The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group. Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
Canadians equally split on their confidence in the housing market
Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell. “The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.” Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:
- 48% of Canadians would like to live closer to green spaces
- 48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
- 33% of Canadians would like more square footage in their home and have realized they need more space
- 44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)
About the 2020 RE/MAX Fall Market Outlook Report The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments..
Buyer’s market expected in 2020, prices to drop 2%
The St. John’s housing market will continue to favour buyers in 2020, according to the 2020 RE/MAX Housing Market Outlook Report. The sale price expectation for St. John’s Metro in 2020 is a decline of two per cent.
While the number of sales increased year over year, the average home price dropped 1.8 per cent from 2018 to 2019. Increased consumer confidence is bolstering the market after a multi-year decline, however buyer’s market conditions are expected to persist in 2020.
Affordability is always a topic of conversation, but the St. John’s housing market offers greater affordability than many other major cities across the Canada. Consumer confidence is expected to stabilize the market, particularly with the flurry of activity at the low end of the market and some offshore oil projects. However, an increasingly aging population, combined with migration to other parts of Canada, is bound to impact the St. John’s housing market at some point in the future.
Move-up and first-time buyers are expected to drive market activity in 2020, with the Galway subdivision expected to be in highest demand.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.
In Atlantic Canada, Halifax and Saint John have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single-detached homes. At the same time, the region’s condominium market is being driven by retirees. Conversely, the market in St. John’s is expected to recover in 2020, with increased consumer confidence expected to stabilize the market. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.
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