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Homes that sell for excessive demand, receive more offers, sell at first sight. For New Brunswick’s buzzing real estate market, it’s all part of the new normal.
The Canadian Real Estate Association released its October statistics Monday, showing “historically strong” national home sales for the fourth consecutive month.
Even taking into account a “very quiet spring market” this year, the report says, it is the second highest record between January and October for domestic sales, after just 2016.
“Anyone who is waiting for the Canadian home market to start stabilizing … will have to wait a little longer,” said Shaun Cathcart, senior economist with the Canadian Real Estate Association. “At this point, the activity in 2020 has a chance to set an annual record.”
It’s a trend that has been occurring in New Brunswick for months, accompanied by buying behavior the province has not traditionally seen, says the president of the province’s real estate association.
It is common now that people buying houses are not seen. Often, the first time they see it is closing.– Andre Malenfant, New Brunswick Real Estate Association
“We see record sales every month,” New Brunswick Real Estate Association President Andre Malenfant said Monday, noting that homes are selling faster and at higher prices.
“Traditionally, we have been a balanced market, also a buying market,” he said. “But now we are definitely a sellers’ market.”
Malenfant said a number of factors are driving the climb, chief among them New Brunswick’s handling of the COVID-19 pandemic and “the law of supply and demand.”
“We are continuing to see an increase in buyers from other provinces to move away from COVID,” Malenfant said. “We handled it pretty well and got attention” across Canada.
Buyers are mainly from Ontario, Quebec and British Columbia, Malenfant said. They are doing virtual tours of the houses, offering more than the ask for, sometimes even sparking bidding wars.
“It’s common now to have people buying homes without being seen,” Malenfant said. “Often, the first time they see it is at closure. So they take possession of it, lock themselves in the house and quarantine for 14 days.”
In some cases, he said, buyers will have a New Brunswick friend or relative to visit the home before buying it. But if that’s not an option, the virtual tour can be “detailed enough, accurate enough,” with real estate agents zooming in on every aspect of a home that a potential buyer wishes to take a closer look at.
A tighter than usual supply is also driving up prices, with some people choosing not to put their home up for sale during the pandemic.
There are also more retirees returning home to New Brunswick and retiring earlier than expected due to the pandemic freezing in Western economies, Malenfant said.
Prices in each of the three largest cities are on the rise, with the Greater Moncton area leading the chart with a 15.1% yoy increase in house prices, followed by Saint John with a 12% rise. 3% and Fredericton with 5.3%. percent increase.
But the biggest jump is in northern New Brunswick, where Malenfant said prices were up 48.8% from last year.
So how long can buyers and sellers expect this trend to continue?
“The real estate sector is cyclical,” Malenfant said. “Eventually it will slow down. Next year at this time we will probably see an increase in inventory, many people will put their properties up for sale. But I think it will remain strong for a while.”
BRUNSWICK’S NEW HOME SALES STATS
Provincial
- Average home price in 2020: $ 203,233
- Average home in 2019: $ 180,145
- Year-over-year increase: 12.8 percent
Major Moncton
- Average home price in 2020: $ 225,200
- Average home in 2019: $ 195,700
- Year-over-year increase: 15.1 percent
Saint John
- Average home price in 2020: $ 212,578
- Average home in 2019: $ 189,340
- Year-on-year increase: 12.3 per cent
Fredericton
- Average home price in 2020: $ 196,511
- Average home in 2019: $ 186,585
- Year-on-year increase: 5.3 per cent
Source: Canadian Real Estate Association (CREA)
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