Housing starts for February 2009 have declined in St. John's, Newfoundland by 12% as compared to the February 2008 stats, according to a market report from CMHC. The senior market analyst Chris Janes indicated that this decline compares favourably to that of a 59% pull back in urban Canada.
According to Mr. Janes, the decline in St. John's has allowed builders to catch up from the strong demand of 2008 which kept them behind for most of the year. He said, new home construction in Canada is slowing to more sustainable levels and is forecast to be 160,000 units for 2009.
On the surface one might expect this moderation of demand to have a negetive impact on pricing but there has been nothing to indicate that builders are reducing prices. What we might expect in 2009 is for price increases to moderate as the pace of demand swings back in line with supply.
Labour prices have moved up in 2007 to 2008 as did the raw land prices. These components are not easily adjusted down so there is little expectation that a balanced market will see the selling prices of new homes in St. John's decline.
R. Greg Osmond is a Platinum Award winning Realtor serving St. John's and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information. Find him on facebook and be a friend.