Best Places to Invest in Real Estate in Newfoundland and Labrador 2021

Best Places to Invest in Real Estate in Newfoundland and Labrador 2021

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When you’re in the market for new investment opportunities it can be easy to focus on the major cities and metropolitan areas—they’re popular for a reason. However, this isn’t the only place that you should look into. Smaller provinces and cities also have a lot of real estate investing opportunity if you know what to look for, so you should never rule them out until you’ve done your due diligence.

Table of Contents - Best Places to Invest in Real Estate in Newfoundland and Labrador 2021

Newfoundland and Labrador, the easternmost province of Canada, just might fit the bill for you and your real estate investment portfolio. While not the buzzing cities of Toronto or Vancouver, Newfoundland and Labrador offer a unique setting in which to look at properties. We’ve pulled together a list of some of the most intriguing destinations for real estate investing in 2021, based on economic, demographic, cultural and other factors.

St. John’s

The province’s largest city, which is also its capital, is a great place to start. St. John’s is a city of around 110,00 seated on the Avalon Peninsula. The city is the oldest post-Columbian European settlement in North America, so you can rest assured that it’s not going anywhere anytime soon. Furthermore, it’s experienced a bit of an economic resurgence over the past decade or so as new ways to connect its coastal heritage to a modern economy have emerged.

St. John’s economy took a hit in the 1990s when the Atlantic cod fishery essentially collapsed. Many coastal communities that had relied on fishing for jobs and income for generations were hit hard, and St. John’s was unfortunately no different. The city’s population stagnated as people left for other provinces that had better connections to modern industries.

This has changed in recent years, particularly with the growing importance of the energy industry. Today, companies seeking oil and gas underneath the ocean have set up shop in town. Companies like Chevron, Husky Energy and Suncor Energy all have a big presence in the city, and it’s also the headquarters of ExxonMobil Canada. These companies have well-paying jobs (St. John’s has the second-highest per capita GDP of any Canadian city) that draw people to the region who will then require quality housing, which can represent a real opportunity for real estate investors.

The city is also a cultural hotbed for the entire region. Sports play a large part of life here, with many junior and professional hockey teams. Professional basketball and amateur rugby teams also are based in the city, so there’s always a game to catch if sports are your (or your tenants’) thing.

Other cultural offerings abound here, drawing in families and young couples who want to set up roots in the city. Museums and national historic sites are all over the place, creating many recreational opportunities for residents of St. John’s to enjoy.

As far as the real estate market goes, St. John’s was not immune to the effects of the COVID-19 pandemic. The market stagnated in the early part of 2021, but prices have started to creep back up as people re-enter the housing search. The city may lag a bit behind other Canadian cities when it comes to projected growth in sale prices over the rest of 2021, but the discerning real estate investor can still find value here.

Mount Pearl

The city of Mount Pearl drives home just how small Newfoundland and Labrador is. While it’s the second-largest city in the entire province, it has a population of just over 23,000 and is part of the St. John’s metropolitan area. Originally a summer destination for the affluent members of St. John’s society, the city soon grew its own roots thanks to economic and industrial development that allowed it to sustain a bigger year-round population.

Mount Pearl maintains this type of appeal to many people with its status as a community that’s tied to St. John’s while maintaining its own independent feel. It’s not uncommon for people to live here and commute into the capital, which means that for real estate investors there’s the chance to find properties that people are willing to pay for if it means the right fit for their lifestyle.

Like St. John’s, and most Canadian cities and towns, the coronavirus pandemic affected sale prices, but they have largely rebounded. After hitting a five-year low average sale price of $223,000 in the first quarter of this year, the market is now surging, with average prices meeting the $272,000 mark and showing signs of further climbing.

Inventory is also on the rise after the pandemic essentially crippled it. After seeing home sales hit the single digits at the beginning of these uncertain times, those numbers have skyrocketed. It’s not uncommon now to expect a quarter with dozens of home sales, so if you’re looking to invest in Mount Pearl, now is the time. Expanding inventory coupled with rising prices means that if you strike while the iron is hot, you can expect to find real value.

Other towns to consider

Newfoundland and Labrador have several towns outside of the St. John’s region that are worth considering for real estate investment. Conception Bay, for example, has had a market that has historically kept a very steady rate of growth, which can be appealing for more conservative investors. While you probably won’t strike it rich there, you can count on a property that will likely hold its value, achieve steady growth and offer a consistent piece of any portfolio.

Real estate in Newfoundland and Labrador is seeing similar recovery to other parts of Canada as the country continues to battle its way out of the coronavirus pandemic. Inventory and prices are on the rise across the board as buyers and renters who were unable or unwilling to move during lockdown periods are now broadening their horizons, and the province is a good destination to explore for those who want to look beyond the major bustling cities of bigger provinces.

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Scott Dillingham

Scott Dillingham

I have been investing and lending to real estate investors for nearly 10 years now. After thousands of successful deals between flips, rent to owns, student properties and commercial assets I have developed a deep knowledge of real estate investments and have a passion of sharing this information with the world! If your looking for a lender who specializes in rental property financing you're going to want to connect with me at team@lendcity.ca.