St. John's home prices rising

Demand is driving up the price of homes in St. John's, the area that saw the biggest increase in new-home prices in the country in January, according to Statistics Canada.

The latest new home price index, released last week, found prices in St. John's increased by 1.7 per cent last January alone.  

Kelly Meadus, a first-time buyer, told CBC News she was unable to find a house she wanted in the city for $200,000.

"I thought that would be a reasonable price for a good little house with a bit of character in the neighbourhood that I wanted, but wow, I was mistaken," said Meadus, who said she has been looking at properties online for about a year.

One real estate agent who said he helps many first-time buyers said Meadus's experience is not unusual.

"It is kind of difficult and frustrating," said Stephen Winters. "They have a lot of challenges that they need to meet."

Winters said prices are increasing because demand for houses in St. John's is greater than the available supply.

"The average price in St. John's right now is around $240,000," he said. "So I would say anything around that range and definitely lower than that, you will get multiple offers."

Meadus found a house but only after she opted for a 35-year mortgage and spent much more than she had planned to.

"[It's] kind of scary. Once you really get out there and look around, you've really got to step up quite a bit," she said.

"It's everything we wanted in a house so we went for it and the offer was accepted. It's a big relief."

Winters said it may be easier for first-time buyers in the coming months, when he expects more houses will come on the market in St. John's.