The average new single-detached house price increased in all submarkets during the fourth quarter. The average new house price for the St. John's CMA was $387,439 compared to $351,305 in 2011, up ten per cent. The average sale price for St. John's city was $424,374, up 17 per cent - the largest increase across all submarkets. CBS posted an average new house price of $334,466 during the quarter, up 11 per cent. Paradise recorded a two per cent gain in average price to $376,958 - the lowest price growth across all submarkets. Driven by large custom homes, Torbay posted the highest price of $425,619, up six per cent. Average price in the remainder of the CMA increased five per cent to $374,448.

Throughout the entire St. John's CMA, approximately 80 per cent of all new single-detached homes sold for more than $300,000 during the fourth quarter, with approximately 55 per cent selling for over $350,000. The fastest growing segment of the market was the $400,000 plus segment, which increased to 35 per cent of total new home sales versus 26 per cent in 2011.

Existing Home Market Mixed

Higher inventory levels contributed to a mix existing home market during the fourth quarter. Home buyers had an increased supply of homes to choose from, with inventory levels 14 per cent above 2011's fourth quarter. However, active listings remained on the market for an average of 54 days compared to 72 days during the fourth quarter of 2011, with offers at approximately 98 per cent of list price versus 97 per cent the year before. For the St. John's area, there were 1,435 new residential listings compared to 1,288 during the same period in 2011. Active listings averaged 1,887 a month versus a similar 1,656 during the fourth quarter of 2011.

Despite higher inventory , the average MLS price in the St. John's CMA reached a high of $296,855 compared to $275,488 during the fourth quarter of 2011. The average price continued to be supported by favourable economic and demographic conditions, as well as continued demand for larger and higher priced homes.

Although there is significant uncertainty, mortgage rates are not expected to cahnge in 2012. Slight increases are expected in 2013, but rates will remain low by historical standards.

According to CMHC's best case scenario, for 2012, the one year mortgage rate is forecasted to be within 2.75 per cent to 3.50 per cent. For 2013, the one-year posted mortgage rate is expected to rise and be in the 3.00 per cent to 4.00 per cent range, while the five year posted mortgage rate is forecasted to be within 5.00 per cent to 5.75 per cent, consistent with higher employment and economic growth prospects in 2013.

Housing market activity was supported by continued growth in population, income and employment during the fourth quarter of 2012. Overall, the strong local economy supported demand for both new and existing homes throughout the quarter and the year.

New Home Construction Advanced

New home construction advanced throughout the St. John's area during the fourth quarter of 2012, with additional price growth recorded. There were 523 housing starts versus 478 in 2011. Total single-detached starts activity was 327 units compared to a similar 345 units the year before. A total of 196 multiples were started compared to 133 during the fourth quarter of 2011. These starts included 172 apartments and condos, with the remaining 24 multiples consisting of 16 row structures and eight semi-detached units. With new home price growth continuing to advance, many homebuyers opted for a new single-detached dwelling with a self-contained basement apartment to help manage rising mrtgage carrying costs. This trend contributed to higher multiple starts in 2012.

Submarket level housing starts activity was mixed in the last quarter of 2012. Activity in St. John's City retreated slightly, with 223 total starts recorded. There were 117 single-detached starts versus 143 the year before and 106 multiples compared to 96 during the fourth quarter of 2011. Starts in Paradise grew with 123 units versus 87 in 2011. There were 51 single-detached starts versus 57 in 2011 and 72 multiples compared to 30 during the fourth quarter of 2011. Mt. Pearl posted the strongest gains in percentage terms, with 28 fourth quarter housing starts compared to 12 in 2011. CBS recorded 77 starts compared to 64 the year before, while there were 16 housing starts in Torbay, matching 2011's level. Total housing starts in the remainder of the CMA declined by four units to 56 in 2012.