More cool water is being dumped on the once-hot real estate market in St. John’s, according to data released by two housing groups.
The Canadian Mortgage and Housing Corporation released a survey showing construction activity was down in March in the capital city, after a small recovery in the latter half of 2015.
Home prices have also been flat throughout the last year in St. John’s, according to a second survey by Royal LePage.
In its release, the CMHC called construction in the St. John’s area “weak” in March.
“A lack of economic growth, mostly due to low oil prices, continued to restrain new home construction activity in March,” said CMHC analyst Chris Janes in a press release.
Construction started on only seven houses in St. John’s last month, compared to 15 during the same period one year ago.
The CMHC’s “trend measurement” — a longer-term measurement of activity — also shows that the housing market is slowing down.
As well, 2016 has seen a big drop in construction activity for “multiple housing” units such as apartment buildings and row houses.
In the first three months of 2016, only 16 units were started in these buildings, compared to 127 in the first three months of last year.
The Royal LePage survey of home prices in the area shows more dark clouds hovering.
Prices for bungalows and two-storey homes were relatively flat, both increasing less than one per cent over the last year.
The price for condominiums plummeted, falling almost 10 per cent in the same time frame.
Across Canada, the average price of a home increased by eight per cent year-over-year.
Glenn Larkin, a realtor in St. John’s with Royal LePage, said that the slow market did have an upside.
“First-time home buyers in the city are benefiting from a buyer’s market, which is providing them with more options and the opportunity to negotiate,” he said in a press release.
Royal LePage said its survey is showing “remarkable” differences between regional housing markets.
The group says home prices in Alberta and Newfoundland are just starting to adjust to the oil downturn.