By Craig Westcott/March 24, 2022
It's the biggest inventory of buildings, lands and other properties to ever hit the local real estate market at one time, and many people in the industry don't quite know what to make of it or what it's impact will be.
The list runs the gamut from iconic churches such as the Basilica and Corpus Christie in St. John's, to single family homes and lots in Mount Pearl, to a ball field in Conception Bay South.
There are literally pages and pages of properties about to hit the market as the Roman Catholic Episcopal Corporation tries to sell assets to pay settlements to some of the victims of abuse at Mount Cashel Orphanage.
In Mount Pearl alone, the package includes both Mary Queen of the World Church and rectory and St. Peter's Church and rectory as well as numerous parcels of vacant land, and a modern two-bedroom home on Ashford Drive.
They are unique properties," allowed veteran realtor and businessman Jim Burton of RE/MAX Infinity.
"There are obviously stages that you go through to market a property to get the highest and best usage out of it and I think having a willing buyer and a willing seller come together and look at what opportunities there are for each of these properties is going to be paramount,” he said. “How do you do that? I guess for each of these properties the highest and best use is probably going to be determined by what surrounds them, and bringing together a team of professionals to outline a plan that is going to be best for that community. That may vary a bit for each of the properties. In doing any kind of development, you need to have engineers, you need to have architects, you need to have realtors and communication with the municipality and the public to ensure that what you're doing is going to add to the life and success of that community. Each of these properties are unique and they each deserve that attention. And I would like to think that process will happen at some point. It's difficult to go to the market with an abundance of properties and not flood the market.”
But Burton admitted he is fearful that’s exactly what will happen.
He offers the example of a subdivision. Say your development has 40 lots. If you put that many homes on the market at once, it floods the market and depreciates the value of all the homes. Better to develop and offer eight or 10 for sale at a time.
"If you're coming out with large properties like this, and listing them all at once, it needs to be carefully done," Burton advised. "It needs to be very carefully done and involve the experts to establish the best and highest intended usage."
Another important consideration, Burton allowed, is the sensitivity around the nature of the properties and the reason for the sale.
"This is a very fragile situation," Burton said. "You're dealing with a group that has to be remunerated based on things that were done in the past and I guess maybe listing them all and trying to sell them to create that cash flow that's needed to make these payouts are important, but equally important is to maximize the value of the sale of each of these properties so that the appropriate people get remunerated at the end of the day and at a level that has the best yield. Is that happening now? I don't know. Maybe it will, maybe they will get maximum dollar for all the properties by tendering them all at once. Maybe listing one or two and going through the market and letting the market determine what they're worth and then put another two out and study them and talk to the developers about what can go on them would probably be a better yield than trying to sell them all at once. I can only tell you that from working on properties, in my opinion, the best yield has always been on properties that have been studied and have had a team of experts brought in to establish what is the best yield for that particular land, for that particular property based on the community's needs.
"And some of these properties, I don't know if you can put a price on them," Burton added. "Maybe there needs to be a balance of protecting the places of worship so that the other lands around them can be used (for other things). These are all conversations that need to happen with experts and authorities on the subject at the table together…
"Maybe the authorities will reach out to those in the industry who have a trusted relationship with the churches and they'll want to work with a plan to establish the marketing and expert advice that's needed to create the best yield on each of these properties. That's where it's going to get interesting and that's where the real fun will start, working on the land development and on what works for the community – (like) are there going to be more playgrounds, are there going to be more daycares, is there going to be affordable homes? And that's something else our industry needs to be looking at. We need to build more homes for those who need to enter home ownership. For me, that's an inspiring thing as I get into the latter part of my career, helping others come into home ownership who couldn't necessarily get there. How do we find solutions for those people? That's the obligation that I think a lot of us need to keep in mind."
As for the condition of the market presently, Burton said it's perhaps the deepest sellers’ market he's ever seen.
"There's just no inventory," he said. "We're still dealing with historic low interest rates. They've gone up a little bit, but still when you look at the average five-year rate, we're well below the average mortgage rate that we've seen over the last say 20 years. We're still dealing with fallout from Covid and people wanting to move back to Newfoundland. It's not as brisk as we've seen in the past, but that's still there.”
That's in addition to the local market of first-time home buyers, empty nesters who are selling their homes to move to smaller quarters, and workers who are looking for bigger houses so they can work from home, Burton added.
"The current inventories are at record lows," Burton said. "And we've got buyers stacked up ready to buy and they can't find homes, they just can't find them."
The next decade looks to be just as strong demand wise.
"The premier has already come out and said he wants to bring in 5,100 families by 2025 annually," Burton noted. “That's going to be incredible growth for the real estate market. It's going to put added pressure on inventory, and I think real estate values will continue to appreciate in and around the St. John's area based on population growth that lies ahead."
