Local analyst disagrees with dismal St. John's housing forecast

Analysts are disagreeing about just how badly the low price of oil will hit the housing market in St. John's.
An analyst with Canada Mortgage and Housing Corporation disagrees with TD Banks' prediction that housing prices are going to take a dip in St. John's. (CBC)

Analysts are disagreeing about just how badly the low price of oil will hit the housing market in St. John's.

A recent report by TD Bank predicted a drop of up to 10 per cent in the Newfoundland and Labrador housing market.

However, an analyst with the Canada Mortgage and Housing Corporation disagrees.

Chris Janes said TD Bank is out of touch with the reality in the local market.

"These people don't have any local intelligence on the ground, as we do here at CMHC," he said. 

"I was a little thrown off by it."

Janes said prices in Newfoundland and Labrador should remain stable.

"From our perspective at CMHC, the forecast is for prices to be flat to slightly increasing at the rate of inflation," Janes told CBC News. 

TD blames their forcasted decline on the low price of oil, and their report said housing will be one of the areas that will take a hit from the drop in crude.

Employment and housing prices

In an interview on Monday, Finance Minister Ross Wiseman also said the housing market could potentially take a hit from slumping oil prices.

Chris Janes with Canada Mortgage and Housing Corporation thinks employment numbers are one of the biggest factors in predicting changes to housing prices. (CBC)

However, almost all oil development is still continuing in the province, and there have been no major layoffs in any of the projects currently underway.

Janes said that as long as people are still working, demand for houses will continue as well.

"The biggest driver of housing is employment," he told CBC.

"So as long as people have a job and are employed, we see the risk to the housing market as being rather limited."

With files from Peter Cowan

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.