Luxury homes selling steady

Andrew
Andrew Robinson
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First-quarter sales consistent with last two years

Growth in population, income and employment are all leading to an increase in the construction of high end housing in the greater St. John’s area, according to a recent report. Average upscale housing prices have risen to more than $602,000 from $585,000 last year. — Photo by Gary Hebbard/The Telegram

Those looking for a luxury home in the greater St. John’s area (GSA) are doing so in a market that’s showing steady strength, based on results from a report released Wednesday by RE/MAX.

Through the first-quarter of 2012, 16 units were purchased for a price exceeding $500,000, down slightly from figures for 2010 (17) and 2011 (18), but still well ahead of first-quarter sales in 2007 (one), 2008 (four), and 2009 (six).

“You’ve got a lot of different factors that are contributing to the upper-end (sales),” said RE/MAX realtor Jim Burton.

Low interest rates across Canada have benefited sales, he said. But for the GSA, Burton said major projects happening all over the province are attracting new people looking for accommodations similar to what they were accustomed to in their last place of residence.

“We’ve experiencing population growth. We’re experiencing income growth, and employment growth. Those things all add to that great thing you’re feeling in your belly called the consumer confidence.”

The move-up market for people looking to sell a home in order to move into a larger one has also benefited as a result, Burton said.

The report says the average price for upper-end properties in the GSA has climbed to $602,360 in the detached category, almost a three per cent increase over the previous figure of $585,451.

Luxury condominium sales were up for the first-quarter, jumping from one sale in the previous year’s first-quarter to six in 2012, with the average price rising by more than $100,000 to almost $690,000.

The demand for luxury condominiums and homes costing more than $1 million outstrips supply at the moment, according to Burton. The report identified four such condominiums and three homes costing in excess of $1 million.

“We don’t have enough inventory to meet the demand for upper-end properties, and we’re having difficulty finding listings,” he said.

However, none of the most expensive homes sold in the first three months of 2012 exceeded the $1-million price tag, with the largest sale coming from a Place Bonaventure condominium at $840,000.

In December, a 3,000-square-foot contemporary bungalow sold for $1.55 million.

On the lower end of the luxury housing market, the report found 71 listings available for sale in the $500,000-$600,000 price range.

“You may see those in areas such as throughout Paradise, Conception Bay South and into the east end. There’s no one area that has more than others.”

While St. John’s is among the oldest cities in North America, Burton notes that 30 per cent of its housing stock consists of new units built since 1990.

“We’ve had amazing growth over the last couple of decades, and it continues.”

Moving forward, Burton expects the GSA’s real estate market to remain strong as more people move into the area, though buyers may not welcome the news of continued price appreciation.

arobinson@thetelegram.com

Twitter: TeleAndrew

Geographic location: Canada, North America

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Recent comments

  • Turry from town
    May 17, 2012 - 20:45

    Well said Holden! Like asking the fox about the henhouse. As housing costs are inflated by greedy developers and realestate agents who drive up the cost of a house,their profit,commission or whatever you want to call it increases making these people richer. As for David Wilson, 1 percent commission or 4 or 5 or 6 is alot on a home that costs 400,000.00 today, compared to three years ago when that same house was 200,000.00 and the commissions were unchanged. Nowonder Burton is alwats smiling.

  • Peter
    May 17, 2012 - 14:52

    The Dobbins must love the fact you used their house as your storys photo. I mean, why else would you build an eye sore like that right in the center of the city? The reason that house isn't build somewhere with lots of land is because nobody will be able to notice them. Nothing but a LOOK AT ME statement.

    • Chris Chafe
      May 17, 2012 - 15:33

      I would rather look at this house rather than some of the garbage shacks built downtown.

    • a business man
      May 20, 2012 - 10:53

      From my point of view, by building this house in the center of the city, they have one of the nicest house in the area. In other words, they have made their home much more valuable than their neighbours. if this house were to be put for sale at a later date, this so called LOOK AT ME statement gives them something that makes their home worth more to potential buyers, and make the other people's homes (the competition) worth less. So if you ask me, from a business point of view, the location of this house is a very sound decision.

    • Brett
      May 22, 2012 - 20:40

      At many many many millions - I don't see there being too many buyers going in and buying it. I don't think a property like this is a money maker. It's a big expense (debilitating liability for someone with a smaller net worth), but she won't get her money back on that property. There's just no market for it.

  • Darren
    May 17, 2012 - 10:30

    David, there are real estate companies taking less than the 6% you are reporting. One that comes to mind is One Percent Realty and also most agents I have come in contact with charge a 3-4%. I am not a real estate agent, just sold a house in the the last year

    • David Wilson
      May 17, 2012 - 14:59

      David, One Percent Realty are the only bright spot in the real estate market. They Charge $7,800 for homes up to $600,000. On a $300,000 house that works out to 2.6%, a bit more than the "One Percent" they market their company on. Nonethless, they are still better for putting more money in the sellers pocket then their 6% commission buddies.

    • David
      May 19, 2012 - 07:38

      Mr. Wilson: 25 years ago, I know of a similar 'low-commission' company set up in Alberta. They went under in less than two years, and it was proved in court (several years later, much too late to help them) that all the other real estate agents colluded and agreed to not show that company's homes to their clients, effectively blackballing those listings and sabotaging their exposure in the market. The appearance of low-rate brokers has happened in lots of markets numerous times, and the industry reacts the exact same thing every time....getting charged with anything is rare, and to be convicted of it in a court is almost unheard of (they end up just paying a fine). Business as usual for the world's most successful cabal besides OPEC.

  • David Wilson
    May 17, 2012 - 08:45

    House prices are on the steady rise, but the real estate fees are still at 6%, As the house prices go up, the agents are not doing any more work for the seller to warrant the increase in commission. We are always 10 years behind the rest of the country, I guess we will see these lowered commission rates on million dollar houses maybe by 2020.

    • David
      May 17, 2012 - 14:09

      If preople bothered to ever figure out how a traditional realtor's commission actually works, most peole would get physically sick. It is truly evil, corrupt and indefensible.

    • a business man
      May 18, 2012 - 10:47

      Actually, if I am not mistaken, real estate commissions are negotiable. Yes, the standard may be 6%, but you are free to negotiate that down if you'd like. I do.

    • David
      May 19, 2012 - 07:18

      First, realtors will lie to you and tell you that their office won't let them negotiate their commission -- - outright lie. Second, all real estate agents realize that their solidarity as a group is the only thing keeping their incomes propped up, so inter-firm collusion is entirely rational and in their own self-interest. Third, most people do not have the knowledge or guts to stand up[ for their rights...they just want a house, and tacking on thousands onto their mortgage, isn't "out-of-pocket" money (....well, at least, they don't feel like it is is....ha!)

  • Holden
    May 17, 2012 - 07:48

    I always go to a salesman to learn how a market is doing. If I was stupid that is.