Sales in N.L.'s tight housing market are soaring, thanks to cash-flush newcomers: agent

There's stiff competition among prospective home buyers in the St. John's region because the number of listings are unusually low and demand is surging.

One real estate agent said deep-pocketed buyers from outside the province are primarily to blame for inventory levels that are the lowest he's ever seen.

"The market is very robust, inventory is low and you're going to need to compete for the most part," said Jerry Boyles, an agent with Royal LePage Property Consultants.

Here's an extreme case: a house in the city's east end recently went on the market for $309,000, and it attracted 28 bids. It eventually sold for more than $60,000 over the list price.

Properties with two self-contained dwelling units known as two-apartments are especially sought after.

Over the last six months, nearly half of every listing in the St. John's region sold for higher than the asking price, and 13 per cent of those fetched more than a 10 per cent premium, according to Bill Stirling, CEO of the Newfoundland and Labrador Association of Realtors

Stirling said it's unchartered territory for the local market.

"If a property comes on the market now and it's priced where it should be .. they're selling very quickly," said Stirling.

It was the hottest October on record in the province for homes sold — 726 — through the association's multiple listing service. That's nearly 40 per cent higher than October 2023.

There's currently a four-month inventory of listings in the St. John's area. That means if no other houses were listed, the market would be dry by March. Traditionally, there's a nine- to 10-month inventory, Stirling explained.

"So that's a very strong sellers' market," said Stirling. "There are a lot of buyers out there competing for very few houses."

So what's creating this very tight market? There's a variety of factors, but Boyles says it's primarily a consequence of something that started during the height of the COVID-19 pandemic, when cash-flush buyers from other provinces started flocking to Newfoundland and Labrador like moths to a porch light.

These buyers, many of whom had ties to the province, started selling off their high-priced properties in Ontario and British Columbia for huge profits, and looked eastward with the promise of a slower pace and more affordable living.

They gobbled up homes in this province for much lower prices than what they were accustomed to, and were more than willing to pay a premium to get what they wanted.