The provincial housing market defied national trends in March, posting a double-digit increase in home prices compared to last year, according to a New Brunswick Real Estate Association report released Tuesday. The average residential home price in the province jumped 11 per cent to $152,415 in March compared to a national drop of 7.7 per cent.
Saint John showed the biggest climb in home prices, increasing 13 per cent last month compared with 2008. Fredericton followed with an increase of 9.2 per cent and Moncton came in last at 4.5 per cent.
The value of all home sales in New Brunswick in March totalled $76.4 million, a nine per cent jump from a year earlier. Dwayne Hayes, president of the New Brunswick Real Estate Association, said the overall picture for the province’s real estate market is positive.”The general message is that our market is doing the opposite of what is going on nationally,” he said. “With spring here, we expect things to pick up even more. It’s a good time to buy or sell a home in the province.”
However, March saw an increase in new residential listings of about seven per cent over one year earlier and a 17 per cent increase in active listings, which could suggest a drop in consumer confidence.
In addition, although average prices have gone up, the number of homes with a ‘For Sale’ sign on the front lawn has declined 2.5 per cent from the same month last year. The drop in home sales across Atlantic Canada is evidence that cracks are spreading through the eastern part of the country’s housing market, according to an RBC Economics report on housing and affordability released last week.
“The all-round economic gloom is likely to soften market conditions in the region in the period ahead,” the report said. “With demand for housing facing significant headwinds, positive market sentiment is set to tone down.”
Hayes said stable mortgage rates will help sell more homes in New Brunswick, especially at the low levels homebuyers now have access to.
“Despite growing inventory levels in most regions,” he said, “both buyers and sellers seem to have confidence in the market.” However, Hayes admitted that the credit crunch has changed buyers’ perceptions of purchasing a new home.
“Everyone is just more hesitant before making the big-ticket purchases,” he said.
Robert Hogue, a senior economist with RBC Economics, said in an earlier interview with the Telegraph-Journal that markets in the Atlantic region continue to be supported by a reasonably good balance between buyers and sellers. “It’s one of the last regions holding out,” he said during an interview from Toronto. “In fact, St. John’s is the hottest market in the country and there is still reasonable optimism in the rest of Atlantic Canada too.”
But the weakness visible in the western part of country is slowly spreading east, becoming a coast-to-coast phenomenon, he said.
“It’s still considered a balanced market in Atlantic Canada – which is quite an achievement given the economy – but soon the slowdown is starting to translate into lower home prices,” he said.
The RBC report is one of the first housing market outlooks that paints a less rosy picture for Atlantic Canada’s real estate market. “I won’t judge other reports but at this point they are strictly looking backward if they say Atlantic Canada is insulated from what’s going on across the country,” he said.
“The region’s resistance to the maelstrom that capsized global financial markets is likely to wane until the economy picks up steam late this year and next year.”
– BRETT BUNDALE Published on page B1, Wednesday March 22nd, 2009