A housing boom in Newfoundland and Labrador has been in stark contrast to most of the rest of Canada. (CBC)

Newfoundland and Labrador appears to be bucking a national trend that has seen housing prices flatten across most of the rest of the country.

While prices dropped nationally by about 11 per cent in the last year, they climbed by about 20 per cent in Newfoundland and Labrador — a sign, realtors said, of a different economic trend in the province.

"Last year was a record year," said Edwina Baldwin, president of the Newfoundland and Labrador Association of Realtors.

"That doesn't mean the bottom is out of it. Basically, what it [has] done is just increased the value of your home. People [have] to be aware that prices will continue to go up. Our economy in Newfoundland and Labrador is doing wonderful."

Not all signs are rosy. In January, housing sales fell by nearly 25 per cent compared to the same month in 2008.

Debbie Hanlon, owner of Hanlon Realty, said a drop in sales does not mean trouble ahead. She said the market is cooling down after being superhot only a few months ago.

"That happened when the Hebron deal was announced and then people did buy houses sight unseen," said Hanlon, referring to the deal to develop the fourth offshore field off Newfoundland's southeast coast.

"The fact they got into multiple bidding situations caused the prices to go higher but just last week we had two of those situations in our own office."

Canada Mortgage and Housing expects that housing starts in Newfoundland and Labrador will drop by more than 15 per cent in 2009, although it expects more activity with condominiums.

CMHC does expect real estate prices in the province to increase, but only marginally.