Local analyst disagrees with dismal St. John's housing forecast

Analysts are disagreeing about just how badly the low price of oil will hit the housing market in St. John's.

A recent report by TD Bank predicteda drop of up to 10 per cent in the Newfoundland and Labrador housing market.

However, an analyst withthe Canada Mortgage and Housing Corporation disagrees.

Chris Janes said TD Bank is out of touch with the reality in the local market.

"These people don't have any local intelligence on the ground, as we do here at CMHC," he said.

"I was a little thrown off by it."

Janes said prices in Newfoundland and Labrador should remain stable.

"From our perspective at CMHC, theforecast is for prices to be flat to slightly increasing at the rate of inflation," Janestold CBC News.

TD blames their forcasted decline on the low price of oil, and their report said housing will be one of the areas that will take a hit from the drop in crude.

Employment and housing prices

In an interview on Monday, Finance Minister Ross Wiseman also said the housing market could potentially take a hit from slumping oil prices.

• $1.5-billion crunch: Ross Wiseman on N.L.'s budget plight

However,almost alloil development is still continuing in the province, and there have been no major layoffs in any of the projects currently underway.

Janes saidthat as long as people are still working, demand for houses will continue as well.

"The biggest driver of housing is employment," he told CBC.

"So as long as people have a job and are employed, we see the risk to the housing market asbeing rather limited."