st. john’s cma housing market...

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CANADA MORTGAGE AND HOUSING CORPORATION

St. John’s CMA Housing Market Today

Chris Janes, Senior Market Analyst

September 9th, 2015

CANADA MORTGAGE AND HOUSING CORPORATION - 2

Main drivers of today’s housing market...

Population

Employment

Income


+1.3% labour force growth

95

100

105

110

115

120

125

130Labour Force, 15-64 yrs, St. John's Area, (000's)

124,500

Source: Statistics Canada Labour Force Survey


+1% employment growth

85

90

95

100

105

110

115

120Employment, 15-64 yrs, St. John's Area (000's)

116,500



5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%Unemployment, 15-64 yrs, St. John's Area

YTD

avg. 6.4%

vs. 6.1% a

year ago

6.4% unemployment rate



$600

$650

$700

$750

$800

$850

$900

$950

$1,000

$1,050Average Weekly Earnings ($), St. John's CMA


Weekly earnings -2.7% to $987 vs. $1,014

-2.7%

YTD

First

yr/yr

decline

since

2006


150

155

160

165

170

175

180

Working age population growth continues

Source: Statistics Canada


Negative: Little to no growth expected in economy &

housing market drivers in 2015/2016

Positive: Healthy list of capital project activity:

Hebron

Muskrat Falls & Gull Island

Future oil field expansions & extensions

White Rose West GBS-type drilling platform construction

Statoil offshore oil discoveries to be developed

Mining & mineral projects in Labrador

Oil sector remains key driver of economy, despite

extreme price volatility

Economic outlook


Are housing starts really this bad?


Much lower YTD housing starts activity:

St. John’s CMA housing starts -22% to 638 vs 817

Singles -25% to 435 vs 580; trending to 680

Multiples -14% to 203 vs 237

Average single-detached price defying logic, +5.7%

to $433K vs $410K

Housing starts activity YTD (August) 2015

Source: CMHC


1,096

985

1,174

1,485

1,382

1,479

1,304 1,292 1,243

907

-

200

400

600

800

1,000

1,200

1,400

1,600

Single-detached starts 10yr avg. 1,235

Avg. 1,235

Annual Single-Detached Starts, St. John’s Area

Source: CMHC


438

290 306378 318 337

619

861

491

323

-

100

200

300

400

500

600

700

800

900

1,000

Multiple starts 10yr avg. 436

Annual Multiple Starts, St. John’s Area

Avg. 436

Source: CMHC


St. John’s CMA total housing starts trend

Source: CMHC


St. John’s CMA single-detached starts trend

Source: CMHC


$196,4

37

$202,6

98

$211,1

23

$230,4

73

$281,8

03

$325,4

36

$351,3

05

$38

7,4

39

$395,3

88

$415,4

35

$43

3,2

25

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Actual new single-detached home prices

Average New Single-Detached House Price, St. John’s Area

Source: CMHC


10%

3%4%

9%

22%

15%

8%

10%

2%

5%5.7%

0%

5%

10%

15%

20%

25%

New home price growth

Average New Single-Detached Price Growth, St. John’s Area

Source and Forecast: CMHC

10yr Avg. 8%

CANADA MORTGAGE AND HOUSING CORPORATION - 18Source: CMHC

New home market today summary...

Housing starts driven by demand, not speculation

Single-detached activity inline with demographics

Multiples driven by multi-unit apartment construction

Prices remain high, despite considerable slowdown


Mixed MLS® activity:

Eastern Region sales +1% to 2,126

Avg. MLS® price -4.2% to $300,440

518 MLS® residential construction listings (-6%); 245

classified as “Exists” (spec homes)

319 single family detached (137 Exist)

99 condo (76 Exist)

58 two apartment (32 Exist)

375 vacant lots

MLS® activity YTD (August)

Source: CMHC; NL Association of REALTORS®

MLS® is a registered trademark of the Canadian Real Estate Association


2,429 2,1832,291

2,235

2,572

2,3062,102 2,126

-

500

1,000

1,500

2,000

2,500

3,000

MLS® Sales, Eastern Region, Jan - Aug

Source: NL Association of REALTORS®


Jan to Aug MLS® sales average 2,281

Avg. 2,281


Existing average MLS® price by submarket




New average MLS® price by submarket



New/Existing Price

Differential:

St. John’s City: $129,604

East Extern: $93,593

Mt. Pearl: $81,819

Paradise: $32,807

CBS: -$7,125

Bay Bulls: $33,615


16.7%14.8%

6.9% 6.3%5.5%

1.7% -4.2%

-10%

-5%

0%

5%

10%

15%

20%

Average MLS® price growth

Eastern Region

9% average annual

growth ‘08 – ‘14

Growth slowing:

YTD: $300,440

-4.2%

Source: NL Association of REALTORS®; Forecast: CMHC


Avg. 9%


0

500

1,000

1,500

2,000

2,500

3,000

Monthly active listings averaging 2,600, up 9%

MLS® Active Listings, Eastern Region




Current MLS® market conditions

Buyers’ Market:

Avg. MLS® price holding steady around $300K

Unit sales flat year/year (+1%)

Housing supply exceeds demand (10 months of supply)

Days on market averaging 70 days

Sale-to-list price ratio of 97% (average accepted offers)

Sale-to-active list ratio of 10% (1 in 10 listings have sold)Source: NL Association of REALTORS®



St. John’s area MLS® market today...

Sales remain steady despite weaker economy

Average prices down, but holding steady since Q2

Buyers’ resale market classification

Low mortgage rates have supported market prices




Fewer single-detached starts due to weak demand, high

prices and weak economic growth

Growth opportunities for new homes in suburban areas

targeted at first-time buyers

No-to-little growth expected in sales & prices in

2015/2016

Housing market final insight...


Housing market final insight...

Multi-unit construction driven by demand for condo quality

rentals, with no material change in vacancy rate

Growth opportunities for well-priced new apartments &

condos in established neighbourhoods

Volatile commodity prices, especially oil, have created

additional downside risk to the current housing forecast


Thank You!

29


Contact Information

Chris Janes

Senior Market Analyst

CMHC

709-772-2403

[email protected]

CANADA MORTGAGE AND HOUSING CORPORATION

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