Continuing sluggishness across many of Canada’s major housing markets has shown no sign of lifting this year, with high interest rates and economic uncertainty still freezing up homebuyers.
But that’s not to say activity has plummeted from coast to coast – and in Newfoundland and Labrador, a province which often bucks trends seen in other markets, mortgage professionals are reporting a busy summer and year to date.
Home sales across the first six months of the year jumped 13.4% compared with the same period in 2024, according to its real estate board, while June sales came in 12.4% higher than the 10-year average for June (although they were 6.4% under the five-year average).
St. John’s saw some challenges, with residential activity in the capital inching upwards by 1.9% even as single detached home sales fell by 19.2% over the same time last year.
Still, elsewhere in the province, homebuying activity spiked by 18.6% year over year, and the benchmark price for a single-family home rose by 10.7% to $327,500.
Broker Andrew Knee (pictured top) of East Coast Mortgage Brokers told Canadian Mortgage Professional he’d seen a “significant jump” in his clients’ average buying prices, and said lenders, brokers, and borrowers had barely had a moment to catch breath in a frenetic market.
That runup in home prices has arrived partly because of a continuing lack of supply across the province, with still-strong activity and homebuying interest doing little to ease those pressures.
“We’re seeing a lot of over-asking bids,” Knee said. “The market is certainly competitive. Anything with two units in it right now, it’s almost a ‘name your price.’”
Robust market creating some headwinds for first-time buyers
Newfoundland was spared some of the alarming price appreciation seen in Toronto and Vancouver during the pandemic, keeping affordability within reach for most first-time homebuyers in recent years.
Its market motored at a steady clip even as others fired on all cylinders between 2020 and 2022, bolstered by a record-low-rate environment.
Now, the busy market is presenting some hurdles for Newfoundlanders purchasing for the first time. “It’s creeping up there,” Knee said. “The $300,000 house last year is a $400,000 house this year. The $200,000 is now at $300,000. It is creating a few challenges. You’re seeing a few more cosigners.”
It’s not just the purchase market where activity is elevated, either. Knee reported a bump in refinancing to help clients pay off debt or tap into home equity, particularly as cost-of-living struggles continue.
The summer months can often see purchase activity cool, and economic anxiety related to the US-Canada trade war has also weighed against the national housing market’s prospects in the first half of the year.
What’s in store for Newfoundland’s housing market for the rest of 2025?
A recent Royal Bank of Canada (RBC) analysis noted that Atlantic Canada isn’t “entirely unscathed” from trade tensions, but included St. John’s among Edmonton, Saskatoon, Regina, and Quebec City as a city whose prospects remain “relatively [sturdy]” for the year.
But looking ahead to the rest of 2025, Knee said there aren’t many signs that the Newfoundland housing and mortgage markets are set for a slowdown anytime soon.
New listings were up significantly in June compared with the same time last year, with 1,103 new residential listings hitting the market – but active listings plunged by 20.2% and remained a full 36.2% below the 10-year average for the month.
Still, while construction in major markets could slow to a crawl thanks to lower demand, Knee said he’s seeing some cause for optimism in Newfoundland on a potential improvement on the supply front.
“We’re starting to see more development here, and there’s even talk of apartment buildings coming in now,” he said.
“So it’s going to alleviate some rent backup that we have. And there are still builders building two-unit properties, multi-unit properties, and they’re selling quicker than they can build them. I don’t see any slowdown, any dip anytime soon – which is a great thing.”
CMP
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