Pandemic buying spree turns N.B. real estate lemons into lemonade

Vacant New Brunswick land, half-built developments and empty building lots that have attracted no interest from buyers, in some cases for decades, are suddenly being swept up in the province's sizzling real estate markets as Canadians continue to look east for property and a place to settle.

"I've been doing this for 20 years and I've never seen a market like this," said Marcus Power, an agent with ReMax in Saint John.

"It's absolutely crazy."

Power is involved in selling garden homes and townhouses in a notorious Saint John development on Lancaster Avenue that was abandoned in the middle of construction in 2008 and spent most of the last decade as an eyesore.

Purchased by Moncton, N.B., builder Pierre Vautour in 2019, fixed up and rebranded "Fallsview Village" for its perch high above the city's famed reversing rapids, the development has since become a pandemic hot property.

"People came out of the woodwork all of a sudden," said Power.

Fallsview is now completely sold out, including four new units that still are under construction. Foundations for additional units are being poured next week.

"Before the pandemic, it was a little tough because we were getting over the stigma on that property sitting there for 10 years and nothing being done," said Power.

Newcomers driving hot market

Residential real estate sales around New Brunswick set records last year, much of it driven by people moving into the province from elsewhere in Canada.

New Statistics Canada population estimates show New Brunswick had a gain of 1,426 people from other provinces in 2020, the fourth year in a row it attracted more people from elsewhere in Canada than it lost. Between October and December alone, the gain was 460, the largest net inflow of Canadians during those months since 1975. Three-quarters of that was people arriving from Ontario.

The provincial government's property transfer tax was applied to an estimated $3.9 billion in real estate sales for the year, $1.1 billion more than budgeted. The buying spree has had a number of effects, including depleting the supply of houses for sale, and driving up prices.

According to the Canadian Real Estate Association, there were just 2,221 residential listings for purchase in New Brunswick at the end of February this year, 1,900 fewer than last February. Buyers are snapping up what is available faster than new sellers putting properties on the market.

Once-ignored properties now get attention

With people still coming to the province and a dwindling supply of houses to buy, there has been growing interest in alternatives, including vacant properties and failed older developments that have taken on a new appeal.

At the foot of Sea Street in Saint John, 14 lots with panoramic views of the Bay of Fundy that have been for sale with no takers since 2005 sold in a single transaction last month.

Kevin Harris, who owns the local Exit Realty franchise, formed a company with Vietnamese architect Nam Nguyen to build $359,000 garden homes on each lot. He said although locals showed little interest in the properties over the last 15 years, ocean views are prized by those moving to New Brunswick.

"We have already sold some of those homes," said Harris. "People just want to understand, 'We can have this view for this amount of money? Looking at the Bay of Fundy and this is the price?'"

Power said he used to handle six land sales a year, but is now doing that each quarter and most of that business involves buyers from away.

One group of Vancouver investors have bought more than 300 hectares of land in Saint John in two transactions over the last two months, including some undeveloped riverfront property just three kilometres upstream from the Reversing Falls.

Power said his land sales have been to Ontario and B.C.-based buyers.

He said some of those sales have been to people with plans to hold them as long-term investments, but some have been to developers interested in meeting the high demand for housing.

"Every time we list a house right now, we give people three days to come have a viewing and we are looking at offers on the third or fourth day," Power said. "There are a few different investors looking to get into this market because we're going to need homes."