Never mind Toronto, Vancouver or Calgary. The head of Canada's largest real estate brokerage says the housing market that has most surprised him this year is St. John's.
"We expected considerable slowing and it really hasn't, the market continues to drive ahead at a faster pace than the rest of the country," says Royal LePage's CEO Phil Soper.
The city's "winning streak" is going on a decade now, and detached houses are no longer affordable by normal standards for a city of that size, Mr. Soper adds. "It continues to be a very boisterous small market."
Royal LePage's third-quarter survey of the Canadian real estate market, released this week, found that the average price of a detached two-storey home in St. John's rose 6 per cent from a year earlier, to $424,167. Prices of detached bungalows gained 5.9 per cent to $313,500 and condo prices increased 5.1 per cent to $331,500.
The population of the St. John's area is roughly 200,000 people, in the same ballpark as Regina, where the average price of a two-storey home is $346,450.
St. John's prices are higher than those in Halifax (where an average detached two-storey house is $331,833), Montreal ($403,714), Ottawa ($406,264), Winnipeg ($341,863) and Edmonton ($379,463).
The 6-per-cent year-over-year jump in prices of two-storey houses in St. John's was among the strongest price growth in the country, overshadowed only by Hamilton (10.2 per cent), Calgary (9.2 per cent), Toronto (7.6 per cent) and Moncton (7 per cent). And it comes as markets including Charlottetown, Fredericton, Montreal, Ottawa, Winnipeg, Regina and Saskatoon each saw year-over-year price growth of less than 2.1 per cent, according to Royal LePage, with some of those cities registering price declines.
More than one-third of the population of Newfoundland and Labrador live in the St. John's area, which benefits from the offshore petroleum industry. St. John's real gross domestic product rose 4.4 per cent from 2012 to 2013, and personal incomes grew by 4.7 per cent, according to city officials. The unemployment rate, meanwhile, fell from 7.2 per cent to 6.1 per cent in the same period, its lowest level ever. Earnings have risen by more than 57 per cent since 2005. And the population has increased for 12 years in a row, with seniors being the fastest-growing age group.
With that as the backdrop, the average house price has more than doubled since 2005. But the city continues to warn that oil production is expected to decline over the long term, and that will have a negative impact on the economy.