Oil and mining developments feeding growth of metro area

Major natural resource projects require a steady supply of people to run them, from initial concept into reality. In this province, project after project has brought waves of workers, many moving into the capital.

“With the oil industry and everything that’s going on, there’s a lot of pressure for development and I guess my answer to that is we’ve got to be very careful,” said St. John’s Coun. Tom Hann, chairman of the city’s planning and housing committee.

“We’ve got to meet the demand of the market, but we’ve also got to be very careful that we protect heritage in the downtown. That we provide green space, walking trails ... make sure that we do it right.”

To see an interactive map of major construction in the St. John's area, click here.

According to the Atlantic Provinces Economic Council, St. John’s has an estimated $650 million of major construction on tap. Included are new subdivisions, neighbourhood expansions, 700 new condo units, and the city’s first new apartment building in more than 30 years going up in Pleasantville.

“A lot of that comes back to the economy,” salesman Jim Burton told The Telegram, pointing to recent growth in employment, income and population as drivers for new construction. He said mortgage rates have also helped.

“That leads to the great feeling you get in your belly that people refer to as consumer confidence. People are out spending. They’re out investing and we’re seeing that in the real estate industry,” Burton said.

In the business for over 25 years, Burton is the frontman for Team Burton at Re/Max Realty, selling in subdivisions from Clovelly Trails to Adam’s Pond in Paradise.

When it comes to residential projects, he said, the team is seeing a steady demand for the single-detached home, but also interest in multi-unit projects.

He pointed to Westfield Condominiums, an estimated $50 million development off Blackmarsh Road, near Captain Whelan Drive, where 60 buildings will be constructed, each with four living spaces of about 1,000 square feet.

“As people move into the city more and more homes will need to be built. We’re probably going to be seeing more and more condominium projects. And maybe the first-time home buyers will be looking at adapting and buying into the condo market versus the bungalow, the detached market,” he said.

Trend to denser living areas

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There is a trend provincially towards denser, multi-unit developments alongside single-detached homes.

According to the provincial government, single-detached housing starts dropped by 11.2 per cent last year, a drop of 2,612 units year over year. On the other hand, multiple starts (row housing, semi-detached homes, apartments and condos) increased by 31.7 per cent to 876 units.

Regardless of what is being built, no one is arguing the growth in St. John’s and surrounding areas.

Over at the Hann Group, realtor Larry Hann said he has been dealing with investors from outside the province and a flood of people from within.

“There’s hundreds of engineers on the ground. In fact, I had a call the other day from a company that’s relocated to the city for the Hebron project. They’re looking for 50 fully furnished units in the city between now and the middle of August,” he said.

“I’m working with a fair number of off-island investors who are looking to park their money into the real estate market here because they see it as a fairly stable market and a steadily advancing market.”

There is pressure to continue rapidly adding more houses, Hann said, but major developers have received hard lessons in doing too much too soon.

“That happened last year. It was the summer, actually it was through the fall of 2010 into 2011, there was a major glut of unsold, finished houses on the market,” he said.

The realtor said enforcement of building regulations in St. John’s, Mount Pearl and Paradise will prevent shabbily built houses being dumped onto the market.

Even so, he cautioned buyers to get their own agents, with knowledge of new home construction (there are courses designed for realtors), “to make sure they’re protected.”

According to the Canada Mortgage and Housing Corp.’s latest report on the St. John’s area, the growth is expected to slow over this year and into the next — but there will still be growth.

Significantly, “current house prices will limit the movement of renters to homeownership,” CMHC states.

In tomorrow’s edition, read about planning, design and the city’s municipal plan review.

Meanwhile, join the conversation on the present and future of St. John’s with The Telegram online.

afitzpatrick@thetelegram.com