Corner Brook -
Despite the global economic downturn and a forecast decrease in housing starts across Canada, Newfoundland and Labrador is expected to be the lone bright spot.
According to a report released by the Canada Mortgage Housing Corporation (CMHC) Feb. 19, the national housing market will mostly range from flat to negative in terms of sales and housing starts in 2009.
"We have the most positive forecast in Canada," said Chris Janes, CMHC's senior market analyst in Newfoundland and Labrador.
"We're the only major centre in Canada among most of the census metropolitan areas (communities of 10,000 people or more) that's expected to have any kind of price growth whatsoever in terms of housing."
In terms of the multiple listing service (MLS), the average price of homes in Newfoundland and Labrador in 2009 will increase from $178,477 in 2008 to $179,500 this year, said Janes. The national average value of a home is expected to drop from $303,607 to $287,900.
The census metropolitan areas monitored by the CMHC in Newfoundland and Labrador include St. John's, Corner Brook, Gander and Grand Falls-Windsor.
"It's not going to be negative anywhere in the province, which is what people want to know," said Janes. "That's the question I get on a daily basis; people are concerned they are going to lose equity on their properties, but we don't think that's going to be the case."
The CMHC is expecting drops in both housing starts and sales, but Janes pointed out that 2008 was a record year for both of these categories and the predicted declines will still leave the market in relatively healthy shape.
The drop in sales will be right on par with the national average of just under 15 per cent
"To be exact, we had 4,695 MLS sales last year and the forecast for this year is around 4,000," said Janes. "If you go back historically, we never hit or exceeded 4,000 until 2007 and had been trending at the 3,000 level before that."
Housing starts, meanwhile, are expected to fall around 18 per cent from 3,261 in 2008 to 2,675 this year.
"But that still puts us up over the historical average," said Janes. "That is still very strong housing start activity. It's just that 18 per cent looks bad when you're coming off a record year."