Put off buying a home in St. John's during the boom? Now might be the time

If you've been waiting for several years to buy a home in St. John's, your patience may have paid off.

The slowdown in the provincial economy over the last few years is being felt in the city's housing market, with a five per cent decrease both in home sales and a five per cent dip for the average price of a house over the course of the last year.

They were waiting to jump in, perhaps waiting for a pullback and now that's happened- Chris Janes

According to housing market analyst Chris Janes, the average price of homes in St. John's has gone down about 10 per cent since it peaked in 2014, which means it could be a good time to pull the trigger for those who were stalling during the last boom.

"It's a great time to buy right now, I would suggest. I think people were waiting as prices kept growing year over year — particularly first time buyers," he told the St. John's Morning Show.

"They were waiting to jump in, perhaps waiting for a pullback and now that's happened and I think they've identified this as a good time to buy."

Rental markets

Janes said the St. John's rental market has also been hit by the economic downturn, with residential vacancy rates up eight per cent from last year, and five per cent for the year prior to that.

The average price of a two-bedroom apartment is stable at around $900 per month, according to Janes, however he said that could be deceiving.

That's because newly-built higher-end apartment developments, such those in the Pleasantville area, drives the average prices up, despite the fact that older apartments may actually be getting cheaper to rent.

"As new inventory coming onto depressed market, it drives up the vacancy rate," he said. "But rent also goes up because those (in Pleasantville) are expensive."

Red tape

As the market shifts from where it was a few years ago, property owners will adjust by making changes to houses and apartments to make them more appealing to those with a lower price point.

However, Janes said some municipalities within the St. John's region often get in the way of allowing those changes to happen smoothly, especially when it comes to people applying to municipalities to modify the properties.

He thinks it's counterproductive for municipalities to block people who just want to think outside the box and adapt to the downturn.

"Red tape has certainly been on the increase over the years as the market as grown," he said.

"When people are trying to get regulation changes to allow a development or get roads re-routed ,or whatever it may take to alter the landscape, they're running up against issues."