If you think property prices are a tad bit unrealistic here on the rock - take a deep breath and check out the prices out west in Vancouver.
Sincerely severely unaffordable!
Canada Mortgage and Housing Corporation’s (CMHC) latest Housing Market Assessment (HMA) 2016 Q1 reports moderate evidence of overvaluation in housing markets across the country.
Broken down across the 15 centres covered by the HMA, overvaluation and overbuilding are the most prevalent problematic conditions with overvaluation detected in eight centres and overbuilding in seven centres.
CMHC indicates that St. John's has a moderate overbuilding situation where the supply of of houses on the market significantly outpaces demand.
The current inventory of newly built homes for sale could have
a larger than expected negative impact on housing starts for 2016
and 2017, if they are not absorbed at a rate that keeps the current
level of inventory stable.
As well, house price growth since 2007 has led to historically high prices in the St. John’s area. If interest rates or unemployment were to increase sharply, heavily indebted households could be forced to liquidate assets, including their homes. This could put downward pressure on house prices and, more generally, on housing market activity.
The level of oil production and the price of oil are two of
the greatest factors underpinning the local economy.