East Coast owner on the "unprecedented" housing surge currently under way
From Ontario to British Columbia and beyond, there’s been much talk in recent weeks of a noticeable cooling in the mortgage market as a slower, more manageable pace takes hold.
Yet one part of Canada that hasn’t witnessed any letup in the mortgage industry is Newfoundland and Labrador, with current levels of activity described by one St. John’s-based broker as “unprecedented” for the province.
Robert Jennings (pictured), owner and mortgage broker at East Coast Mortgage Brokers, told Canadian Mortgage Professional that he has never been busier than in recent months – with the red-hot pace of activity on the east coast marking a “refreshing” change for a region whose real estate market has sometimes lagged behind other parts of the country.
“Pre-COVID, Newfoundland was a very sluggish economy and real estate market. It was very much a buyers’ market – but now the tides have completely turned,” Jennings said.
“We’re seeing things that we haven’t seen before like competing offers, which we rarely had even in healthier markets. We have listing agents waiting a few days to take offers, to build up that competition. You’d never hear of that previously.”
In June, the Newfoundland and Labrador Association of Realtors reported a remarkable sales increase of 107% over the same month last year, dwarfing the national figure of 13.6%. Jennings said that the housing market’s current trajectory in the province was no surprise, given the fact that trends sometimes develop there after they’ve taken hold and passed in the rest of Canada.
“A lot of people had their growth in 2020; I think we’re seeing it in 2021, and I think we’re going to break a lot of records once the dust settles here. I would say that we’re right in the middle of it now,” he said.
“It’s just amazing. Everybody’s busy, backlogged and bottlenecked, appraisers aren’t able to turn around reports, lawyers aren’t able to get title searches. We’re just all trying to make hay while the sun shines.”
Aside from its spectacular scenery, one of the most enticing factors in Newfoundland is its housing affordability. While other areas reported dizzying house price rises as markets heated up, Newfoundland and Labrador recorded comparatively modest increases – in June, just 11.6% over the same month last year.
“Three hundred thousand dollars can get you a lot of house in St. John’s, and it can’t get you anything in Toronto,” Jennings said. “The average price in the GTA is over $1 million. The average price of a house in Canada exceeded $700,000, and the average price of a house in Halifax is $450,000.
“If you want a two-storey with a double garage on half an acre close to the city, you can get one here for $350,000. That’d be $2 million in Toronto or Vancouver.”
During the pandemic, Newfoundland’s mortgage industry also saw an uptick in business thanks to purchases of secondary homes, summer houses and cottages as a result of travel restrictions across the province.
“The cabin and cottage market heated up. Nobody could go to Florida or Vegas, but they could go to the cabin, pond or lake,” Jennings said. “That market heated up really well.”
Much of the growth in smaller Canadian markets during the pandemic has been a result of residents of large urban centres – often from other provinces – opting for a less hectic, less expensive lifestyle elsewhere, facilitated by work-from-home arrangements.
Jennings said that the likes of Halifax had benefited more from that trend than parts of Newfoundland and Labrador. Still, he noted that the country’s gradual reopening, the province’s improving economic prospects and an updated immigration pathway introduced by Premier Andrew Furey were all reasons to believe that newcomers would continue to consider a move to Canada’s easternmost point.
“We were always a great tourist destination – particularly for people in Ontario,” he said. “They could get to see Newfoundland for what it is: peaceful, tranquil, beautiful and rural.
“People who now don’t have to work in the skyscrapers in the downtown core of Toronto could literally work from their backyards in Newfoundland. The hope is that that continues.”