This Canadian Housing Market Is Having a Record-Setting Fall

Bidding wars are the norm in St. John’s as Newfoundland and Labrador set a new benchmark for home sales in October, a time when other Canadian markets were either balanced or still stuck in recovery mode.

By Josh Sherman | 4 minute read

St. John’s, N.L., is in the midst of a homebuying frenzy as more first-timers are stepping onto the property ladder this fall.

As national homes sales in October clocked in at the highest level for a single month in two-plus years and some previously weaker markets returned closer to balanced conditions, one part of the country was setting a new record for activity. 

The Newfoundland and Labrador Association of REALTORS® reports that 726 homes changed hands in the province last month. That may not sound like much compared to major markets such as Toronto or Vancouver, where thousands of transactions occur each month, but it set a new benchmark for the Atlantic Canada market. “This was a substantial increase of 37.5% from October 2023,” the association notes. “This was also a new sales record for the month of October,” the association notes. 

In St. John’s, home to about a third of the province’s population, sales were up 29.3%. First-time homebuyers are largely driving transactions in the metro area, says Mark Gosse, a local realtor with Royal LePage Atlantic Homes. “It’s supply and demand,” he tells Wahi. “We’ve only got so many houses here.”

Bidding wars are common, he adds, noting he saw one listing attract 25 offers about a week ago. The most coveted homes are in the $200,000 to $500,000 price range, particularly those with basement apartments, he says. “You’ve got a lot of people fighting over those.” These homes allow first-time buyers to afford a bigger house. “The income from the basement is going to supplement your income,” he adds, noting, “rents are going crazy, too.”

Population growth has also juiced the market. In 2023, the St. John’s metro area’s population increased by 2.1% in 2023, according to the city, but the pace of homebuilding slowed contributing to a supply squeeze for renters and buyers alike. “A lot of people are moving here,” Gosse says.

While the benchmark price of St. John’s home in October — which was $365,300 soared 10.3%, prices remain relatively affordable compared to markets such as Toronto and Vancouver. However, with prices continually increasing, some homebuyers may be motivated by the fear of missing out, Gosse adds. “I can see that weighing on people.” 

Although some homebuyers are coming from more expensive Canadian markets, Gosse says, sometimes they can’t handle Atlantic Canada’s harsher winter weather. “Someone coming from Ontario and B.C. or somewhere, they quickly pack up and leave, they don’t want to stay — it’s not for them, [home] price or not.”

A seasonal slowdown is expected over the holidays, but the market is still firing on all cylinders, a trend Gosse anticipates will continue in the New Year. “I don’t really see much of a major slowdown,” he says. “Usually it slows down around November,” he tells Wahi. “But I’m still seeing inquiries, it’s still busy, there are still multiple offers going on.”

After St. John’s, the next-largest year-over-year sales increases were observed in Peterborough, Ont., where sales were up 20.8%, and Vancouver, which saw sales surge 19.6% relative to September, notes Scotiabank Economics. Rounding out the top five were the Fraser Valley at 19.5% and Saint John, N.B.

Toronto — by far Canada’s biggest market by sales volume — trailed just behind, with transactions climbing 14% annually.

Wahi Partner Realtor Grant Allardyce notes that while sales are up annually in the Greater Toronto Area, they’re coming from multi-year lows. “For the most part, we’re not in this crazy offer-night situation where homes are being listed well below market value and you’re getting 20 offers,” he tells Wahi. “I like to tell [seller] clients that the sundae is still there, but the cherry on top is gone,” Allardyce adds.

According to Wahi’s latest Market Pulse report, 70% of homes that changed hands in October sold for below the asking price, and 88% of neighbourhoods remained in underbidding territory. A remaining 9% of neighbourhoods were still overbid, and 4% were selling at-asking. “Specifically the more sought-after areas are still trending quite strong,” says Allardyce.

Allardyce credits lower interest rates as the main driver of the increase in activity across the GTA. “The build-up of these interest-rate cuts, we’re starting to see the effect of it,” says Allardyce. Moving forward, new mortgage rules — including a higher cap on insured mortgages that should help more homebuyers enter the single-family market — should translate to stronger demand.

If the Bank of Canada embarks on another cut at its next scheduled announcement on Dec. 11, Allardyce’s hopeful for a stronger market in the spring — at least for single-family homes. “I’m very optimistic on what we’ll see,” he continues.