Newfoundland mortgage rates update
The St. Johns region housing market had another fantastic year in 2007, as MLS sales exceeded 4,000 for the first time, as reported by CMHC. 2008 is expected to follow this trend The expectation for 2008 is for this trend to continue, wwith the Newfoundland and Labrador's positive economic situation continuing to support solid housing price growth and strong sales activity in the next 2 years. GDP growth for the region is set to slow over the 2008-2009 period to 1.5% and 2.0% respectively, however, this is mainly due to reduced oil production. Employment is forecasted to grow by 1.1 in 2008, as a result of the addition of new energy investment activity. Population declines should stop during the year as many Newfoundlanders begin to return from Alberta to support new mega project construction activity, especially by 2009.
Newfoundland & Labrador house resale demand should remain high into 2009
Recent oil announcements have helped to bolster the resale market and home buying activity is expected to continue. Overall, the CMHC believe demand will remain high through to the end of 2008 and into 2009.
Newfoundland & Labrador house prices to grow by 7% in 2008
Although housing sales have been strong in the region for the past 2 years, there has been a large supply of homes for sale which has kept prices down from December 2005 through to May 2007. However, recent activity has seen the average price rise to $149,305 in 2007. 2008 and 2009 look favourable, with price forecast to grow by 7.2 per cent and 6.3 per cent, respectively.
Newfoundland & Labrador key stats
Newfoundland & Labrador
Metric
Canada
Population
2007
Consumer Price Index
Mar'08 (2002 = 100)
506,300
32,568,000
113
113
Average earnings
(Feb'08)
$37,821
$40,914
Unemployment rate
(Mar'08 )
12.6%
6.0%
Housing starts
(Mar'08)
3,400
243,000
2007 (E) Average Residential Resale Price
$149,258
$306,397*
7.0%
$160,000
10.6%
$322,400*
2008 (F)
(annual % change)
2009 (F)
7.2%
$170,000
5.2%
$334,500*
6.3%
$1,552,497,000
3.8%
$152,478,903,000
Chartered banks
Mortgages approved by lenders, residential 2006
Trust companies
$82,032,000
$6,664,898,000
Life and companies other
$240,981,000
$30,225,144,000
Total
$1,875,510,000
$189,368,945,000
Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada 2007 E = estimated by the CMHC * Canada calculation excludes Yukon and Northwest Territories Data based on application received date Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas Quebec data is understated due to low response rate to the surveys in that province. *Conventional Lending data only
Local Market Indicators
Census Metropolitan Area Total Housing Starts MLS sales MLS average price
2007
1,480
4,471
$149,258
St. John's
2008 (F)
1,650
4,650
$160,000
2009 (F)
1,700
4,750
$170,000
Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada MLS = Multiple Listings Service
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