The Newfoundland & Labrador Association of REALTORS® (NLAR) and the Canadian Home Builders’ Association – Newfoundland & Labrador (CHBA-NL) are warning consumers not to read too much into the recent forecast on average house prices released by the Canadian Real Estate Association, so that consumers better understand the context of the report.
“An 8% decrease in the average price in the province does not mean your house is worth 8% less this year.” said NLAR CEO Bill Stirling. “It means a greater portion of the houses sold in the province were in the lower priced end of the market, dragging down the average price. We’ve seen a growing number of first-time buyers, the introduction of the provincial government’s Down Payment Assistance Program, and a remarkable decrease in the number of high-end new housing starts in the province, so that all affects the average price.”
“Builders recognized two years ago that affordability of new homes was becoming an issue,” said CHBA-NL CEO Victoria Belbin. “So several of our members began to build product that was priced in the $250 to $300 thousand range. Builders made the change to meet the needs of the NL market to ensure consumers have the ability to purchase homes that are affordable to them.”
Overall MLS® sales volume is consistent in 2016 with the past two years, however a greater portion of those sales have been in the lower-priced segments of the market, dragging down the average price. “For example, in 2016 there have been four properties sold in the $750,000 to $1 million range. This time last year, we had seen twelve.” said Mr. Stirling. “Conversely, there have been 82 sales in the $220-240,000 range, while last year we had only seen 67.”