Housing prices won't drop 'as long as people have a job,' says analyst

Article courtesy of CBC


Analysts are disagreeing about just how badly the low price of oil will hit the housing market in St. John's.

A recent report by TD Bank predicted a drop of up to 10 per cent in the Newfoundland and Labrador housing market.

However, an analyst with the Canada Mortgage and Housing Corporation disagrees.

Chris Janes said TD Bank is out of touch with the reality in the local market.

"These people don't have any local intelligence on the ground, as we do here at CMHC," he said.

"I was a little thrown off by it."

Janes said prices in Newfoundland and Labrador should remain flat.

"From our perspective at CMHC, the forecast is for prices to be flat to slightly increasing at the rate of inflation," Janes told CBC News.

TD blames their forcasted decline on the low price of oil, and their report said housing will be one of the areas that will take a hit from the drop in crude.

Employment and housing prices

In an interview on Monday, Finance Minister Ross Wiseman also said the housing market could potentially take a hit from slumping oil prices.

Chris Janes with Canada Mortgage and Housing Corporation thinks employment numbers are one of the biggest factors in predicting changes to housing prices. (CBC)

However, almost all oil development is still continuing in the province, and here have been no major layoffs in any of the projects currently underway.

Janes said that as long as people are still working, demand for houses will continue as well.

"The biggest driver of housing is employment," he told CBC.

"So as long as people have a job and are employed, we see the risk to the housing market as being rather limited."

With files from Peter Cowan

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Mark Fagan

Mark Fagan

CENTURY 21 Seller's Choice Inc.
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