The senior market analyst with the Canada Mortgage and Housing Corporation said the average resale price for houses in the city, as of the end of July, is $187,000 — about a 15 per cent rise from the $162,000 at the same time last year.
He said it is a continuation of an upswing since the average house cost $130,000 in January 2008.
Janes said he thinks the prices have peaked, an end of about a five-year growth trend, that particularly increased in the past year and a half.
“We are starting to see now, some increased inventory, which is favourable for buyers obviously,” he said.
“We see price reductions on overpriced listings, and sales are starting to tail off a bit too.
“We have seen some indicators that would suggest prices have likely peaked and, it’s like anything, it can’t go up forever. It has to stabilize at some point.”
He said the increase is a reflection of what is happening provincewide, particularly in St. John’s and similar in Gander and Grand Falls-Windsor. Looking back over the past decade, Janes said Newfoundland and Labrador has been an undervalued market, so the increase was an eventuality.
“We were the only province in Canada where price growth was below the long-term average of what it had been historically,” he said.
“We were poised, I suppose, for some sort of stimulus to come into the market and drive house prices north. We certainly saw that with the oil sector and the benefits that have been derived from that.”
It was a common trend to see people fluctuate toward smaller communities just outside of Corner Brook, mainly due to lower housing costs.
Janes said that is not as much the case as it once was, something he attributed to a higher demand driving up the land values in the more rural municipalities.
The average resale price of housing in the western region is now about $175,000, he said, up from about $155,000 at the end of July 2009.
Even though the housing costs on the market have risen substantially, the analyst feels it remains quite affordable to the public in general.
He said employment and income growth, two key indicators for the housing market, has also experienced growth. However, more significantly, this province remains one of the cheapest places to live.
“If we compare to other markets in Canada, Newfoundland remains one of the most affordable housing markets in the country,” he said. “We have some very strong income growth to back that up as well.
“Provided mortgage rates stay relatively low and everything stays the course, we don’t see it being a big issue in terms of affordability.”
I agree with you. The cost of buying a home in Corner Brook and surrounding areas are not affordable. Where is everyone getting the good jobs in Corner Brook to pay for those big Mortgages?