Newfoundland Investment Properties Doing Well

This is a good time to own or buy rental properties in Newfoundland....at least when it comes to finding a tenant to rent from you. Canada Mortgage and Housing Corporation’s (CMHC) survey of rental accommodations conducted during the month of April indicated that vacancy rates for private apartment structures containing three or more units were lower throughout the province in all centres surveyed.

According to Chris Janes, Senior Market Analyst-NL, the overall vacancy rate in the province was 2.0 per cent during the April survey, with 106 of the 5,285 units surveyed sitting vacant. This represents a reduction of 1.2 percentage points from last April’s rate of 3.2 per cent. The vacancy rate was highest in Bay Roberts CA (Census Agglomerate), while the lowest vacancy rate recorded was in Corner Brook CA.

As expected, average rents were highest within the St. John’s CMA (Census Metropolitan Area), with Bay Roberts CA posting the lowest market rents. The St. John’s CMA rental market posted a vacancy rate of 2.2 per cent for the April survey versus 3.7 per cent last April. This translates into 80 vacant units out of the 3,668 units surveyed.

As the local labour market has remained healthy, a positive net-migration will continue to create rental demand and keep vacancy rates low within the region. Despite rising house prices, solid economic activity, lower interest rates and income growth continue to support demand for home ownership within the St. John’s CMA. Historically high house prices coupled with low levels of new rental supply being added to the market are contributing to the low vacancy rates.

With house prices continuing to advance, demand for rental is expected to remain strong. With a university campus of 1,200 plus students and a solid economy, Corner Brook CA continues to see the fewest vacancies in the province with a vacancy rate of 0.4 per cent compared to 0.6 per cent a year ago. With conditions expected to remain stable within the region, the Corner Brook CA rental market will continue to experience low levels of vacancy and rising rents. In other rental markets, the April survey results were similar.

Gander T (Town), which posted a vacancy rate of 2.3 per cent versus 2.5 per cent last year, continues to be positively impacted by its central location in the province and its international airport. Grand Falls-Windsor CA posted a vacancy rate of 1.3 per cent in April compared to 3.6 per cent a year ago. However, the recent closure of the Abitibi paper mill has created a great deal of uncertainty in this one-industry town. The central region’s economy has been impacted by the current global economic slowdown and has also resulted in a retraction in the surrounding area’s mining industry and many of these transient workers typically rent in Grand Falls-Windsor.

Interest rates are at the lowest they have ever been, the vacancy rate is only 2%, and the availablity of two apartment homes are increasing. If you have been thinking of purchasing an investment property there may not be a better opportunity to take action than now.

R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.