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Pandemic led to a shortage of homes for sale in St. John's and elsewhere in Atlantic Canada

A lot of homes were taken off the real estate market once the COVID-19 pandemic hit. Agents in Atlantic Canada who spoke with The Telegram say more properties are slowly finding their way back to the market. — ANDREW ROBINSON/THE TELEGRAM
A lot of homes were taken off the real estate market once the COVID-19 pandemic hit. Agents in Atlantic Canada who spoke with The Telegram say more properties are slowly finding their way back to the market. — Andrew Robinson

As COVID-19 regulations loosen, real-estate companies have 'seen buyers come back more quickly than sellers'

Although there's variance among major Atlantic Canadian municipalities when it comes to price changes for homes listed on the real estate market, industry insiders suggest common trends deeply tied to the ongoing COVID-19 pandemic are emerging.

The Royal LePage House Price Survey, released last week using data from RPS Real Property Solutions, breaks down house price figures for over 60 major markets across Canada, examining changes for the second quarter of 2020 quarter-over-quarter and year-over-year.

The aggregate median price for homes in Charlottetown (3.5 per cent), Fredericton (1.3 per cent) and Halifax (2.2 per cent) experienced year-over-year increases for the second quarter. Quarter-over-quarter, all three municipalities were relatively flat, with the median price for Halifax homes showing the most change with a 1.4 per cent increase compared to the first quarter of 2020. Nationally, a year-over-year change of 6.8 per cent was reported and a quarter-over-quarter increase of 1.9 per cent.


"When listings declined, buyers started to come out, especially after about that sixth week of lockdown," Larkin said. "When people were allowed to move more freely, the market started acting up." — Glenn Larkin


Year-over-year, median house prices were down in the second quarter for Moncton (-3.3 per cent), with change relatively flat for Saint John (-0.8 per cent) and St. John's (0.2 per cent).

Industry representatives in Nova Scotia and Newfoundland and Labrador who spoke with The Telegram said there's been a supply shortage for homes on the real estate market because of the COVID-19 pandemic.

"As we've seen the regulations tighten around social distancing and all of that stuff, we've seen buyers come back more quickly than sellers," said Matthew Honsberger, broker and owner for Royal LePage Atlantic in Halifax. "That means there's lots of demand and not much supply, and that's causing prices to be pushed up. Multiple-offer scenarios."


Matthew Honsberger, agent and owner for Royal LePage Atlantic, is based in Halifax. - Contributed
Matthew Honsberger, agent and owner for Royal LePage Atlantic, is based in Halifax. - Contributed

Similar in St. John's

Glenn Larkin, a sales representative with Royal LePage Vision Realty in Mount Pearl, has witnessed a similar situation in the St. John's metro area, adding the shortage in homes has helped some long-vacant properties find owners.

"When listings declined, buyers started to come out, especially after about that sixth week of lockdown," Larkin said. "When people were allowed to move more freely, the market started acting up. Then interest rates took a little tumble, down to the lowest they've been in years. That helped stimulate the market."

He also noted the struggling oil and gas sector hurts the local housing market. A downturn in the Alberta and Newfoundland and Labrador economies serves as a "double whammy," he said, given so many Newfoundland and Labrador residents work in the former province.

"Oil is a major player with what goes on in St. John's and other parts of the province," he said.

However, Larkin said activity picked up in late May and continued through June. He reckons there could be a number of contributing factors, with some couples and families living in close quarters during the pandemic realizing they need more space and workers in health care and other busy sectors making use of overtime pay to buy a home.


Glenn Larkin is a sale representative with Royal LePage Vision Realty in Mount Pearl. - Contributed
Glenn Larkin is a sale representative with Royal LePage Vision Realty in Mount Pearl. - Contributed

Rural market

A trend Honsberger and Larkin are noticing is increased interest in rural land. They attribute this to summer travel plans falling through for most people.

"It seems like recreational properties have seen a pretty significant uptick as well in terms of people saying, 'I'm not going to be able to spend a lot of money on vacations.' So, maybe it's the time to buy a cottage, a bigger secondary property or a piece of land," said Honsberger.

"People couldn't go to their trailers, so what they've done is gone and bought a piece of land where they can park their trailer," said Larkin. "People who haven't gone to Florida, Jamaica or wherever they go have gone out and looked at buying a summer cottage," Larkin said. "Smaller priced properties have increased in sales because of those reasons."

For Nova Scotia, Honsberger notes there have been fewer cases of COVID-19 outside the Halifax Regional Municipality and would figure this too helped the rural real estate market.

Future forecasting

While Honsberger acknowledges the continued presence of the COVID-19 virus makes it difficult to accurately forecast, he does expect to see a further rebalancing of the real estate market as the supply of homes continues to increase. This would reduce the need for potential home buyers to compete against each other with agressive offers and in general reduce the number of multiple-offer scenarios for homes.

"There was lots of listings that came on in the last seven days in Nova Scotia," he said. "It's slowly going to start to meet the demand of the buyers."

Larkin is keeping his eye on a number of variables that could play into the future of the real estate market in Newfoundland and Labrador. Those include government budgets, the end of mortgage and tax deferrals and government programs like salary subsidization for businesses and the Canada Emergency Response Benefit.

"When all of that comes due this fall, I'm a bit concerned that people are going to realize, 'oh my, we spent too much of that CERB cheque, we spent too much of the rent cheque, of our tax cheque.' And they're going to realize ... 'we've got some more debt here we didn't realize we had.'"

Twitter: @CBNAndrew

***

Aggregate median house price Q2 2020 (Q2 2019 in brackets)
• St. John's — $319,969 ($319,284)
• Charlottetown — $300,297 ($290,008)
• Halifax — $333,954 ($326,842)
• Fredericton — $268,267 ($264,826)
• Moncton — $207,706 ($214,888)
• Saint John — $221,161 ($222,845)


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