Investing in St. John’s Newfoundland

st johns housesBesides being the location for a long awaited wedding we attended on the weekend, St. John’s is a very historical city!

On June 24th, 1497 John Cabot sailed on the shores of Newfoundland making St. John’s the oldest English-founded settlement in North America. It’s a city full of history. It’s also only a short distance from the most eastern point in Canada found at Cape Spear. It’s a city filled with friendly people, interesting culture and surprisingly, a booming economy!

Real estate prices in St. John’s are on the rise, for sale signs are on the decline and the attitude of the locals is optimistic.

Many of the people who’d left during the boom years in Alberta are now returning home because there are jobs again.

A view of St. John's from Signal Hill

A view of St. John's from Signal Hill

The weather in St. John’s is not very pleasant most of the year, but what it lacks in climate it makes up for in spirit, culture and charm. From late night celebrations on George Street (yes, we even sang some karaoke at Karaoke Cops), to whale watching in Bay Bulls, to friendly and lively chats with locals …. there is SO much to love about St. John’s.

With the recent oil and gas activity off the shores of St. John’s bringing big bucks into the province, Memorial University continuing to attract thousands of students to the City, and the ongoing fishing industry activity there is a lot going on in the City. So, it shouldn’t be that surprising that vacancy rates are low, the inventory of homes on the market is minimal and prices are on the rise.

Would St. John’s make a good place to invest? Personally, I would love to have a collection of the cute and colourful houses but the time, effort and energy required to fly there from the west coast to check up on them is a little too daunting for us at the moment. It’s a 12 hour trip to get there from Vancouver.

But, there are 5 reasons to like the idea of investing in St. John’s real estate:

  • There’s good job growth – mostly in the Oil sector.
  • Students continue to struggle to find good rentals – so there is demand for good quality units. According to a recent article in Canadian Real Estate Magazine (September 2009), the 18 – 24 year old segment of the province is a key source of tenants given that 80% of these people are renters.
  • A vacancy rate of under 3% means rent rates are on the rise.
  • The government doesn’t have a bunch of one sided laws that work against the landlords in the province making it more friendly to an investor than plenty of other provinces in Canada.
  • If you’re looking at a two or three unit property there’s a good chance you will be able to generate some decent cashflow from it. While rent rates are still low, you can find good properties in the $200,000 – $300,000 range which will bring in $1400+ in rent – at least that is what we’re estimating given our chats with a local developer and investor. He also suggested that executive style rentals on the water will bring in $1500/month for a one bedroom. The math on that starts to look good if you’re able to secure good financing rates!
Dave is the son of a fisherman and a fisherman himself - so it only makes sense that he felt right at home in St. John's

Dave is the son of a fisherman and a fisherman himself - so it only makes sense that he felt right at home in St. John's

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5 Comments

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5 responses to “Investing in St. John’s Newfoundland

  1. Thanks for the insight on St. John’s. I have never been to the east coast but it is on my list of places to see.

  2. Hey Julie!

    I’m glad you enjoyed your time in St. John’s! It’s too bad I didn’t know you were visiting, we could have gotten together.

    As a previous landlord, I’m pretty familiar with the local real estate market, let me know if you have any questions.

    FT

  3. @Ruth-Anne – thanks for your comment!! It’s a lovely place. And we were lucky to have pretty good weather most of the week which made it even better!!

    @Million Dollar Journey – I didn’t realize you were in NFLD. I thought you were in Ontario for some reason!! It definitely would have been good to meet!! Thanks for the offer of info … we won’t be buying there even though I’d love to collect some of the colourful houses – I just love them! But, it’s one long trip from Vancouver!! Not a trip I would want to make very often!! But we may have readers that are interested in learning more about investing in St. John’s and I will be sure to send them to you and your blog!! Thanks!

    By the way – we got Screeched In… at the 6:00 min mark you can see how much Dave loves fish 🙂

  4. Jay

    “Would St. John’s make a good place to invest? Personally, I would love to have a collection of the cute and colourful houses..”

    I’m a Newfoundlander born and raised and I wanted to chime in here after reading this. I can tell you that reading these types of sentiments makes one very disheartened.

    I understand the focus of this particular posting, but it’s just so shallow and lacking to say the least. We’re very proud of our heritage and our culture like you’ve noted. The last thing we want is to be treated or traded like a kind of commodity or some entry in your investment portfolio.

    How can anyone who is even partly human talk about culture and history as a kind of investment opportunity? This just blows my mind! These are peoples lives and families that you’re chalking up to nothing more than financial viability.

    I think what they say about most of the people in real estate is true. Your absolutely consumed by the bottom line and the almighty dollar.

  5. Tarot Readings, St. John's, NL

    Hey, don’t forget about Sir Humphry Gilbert! =)

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