Atlantic Canada Real Estate Check-In

Is the Canadian economy in the process of slowing down?

The latest GDP growth rates in October and November were not promising, with 0.1 and 0 per cent, respectively. As the Bank of Canada’s (BoC) interest rate increases travel throughout the financial system, many financial experts believe that national economic conditions could deteriorate this year.

But don’t tell this to Atlantic Canada, which is anticipated to outpace the rest of the country on the GDP front.

According to the Atlantic Provinces Economic Council (APEC), the region’s economy is forecast to rise 1.6 per cent this year, down from the 2.4 per cent gain in 2022. APEC officials attribute the decent growth to sustained in-migration and greater crude oil production.

So, if the east coast’s economy remains in positive territory, how will this impact the Atlantic Canada real estate market? While APEC experts elevated inflation and rising interest rates will continue to weigh on the region’s housing sector, recent industry estimates think some regions will do better than others.

In the meantime, how have they performed six months after the central bank pulled the trigger on its first rate hike in the current tightening cycle?

Checking in on the Atlantic Canada Real Estate Market

Here is a look at the latest housing data in the Atlantic Canada real estate market:

New Brunswick

In November, residential property sales in the New Brunswick real estate market tumbled 31.2 per cent year-over-year, totalling fewer than 700 units, according to the New Brunswick Real Estate Association (NBREA). In the first 11 months of 2022, housing transactions totalled more than 10,000 units, down nearly 20 per cent from the same time a year ago.

On a historical basis, home sales were 12.5 per cent below the five-year average but seven per cent above the decade average for this time of the year.

But while demand eased in the province, prices held steady, association data confirmed. The MLS® Home Price Index (HPI) advanced at an annualized pace of 8.7 per cent to $269,800. The average price of homes sold in November surged 9.2 per cent year-over-year to $265,250.

Here is a look at different property types:

• Single-Family: +8.4 per cent to $270,100
• Townhome: +21.4 per cent to $256,000
• Apartment: +17.7 per cent to $262,000

Meanwhile, new listings fell 3.3 per cent from November 2021 to 823,000 units. Active residential listings soared by close to 21 per cent to 2,649 units. The former was three per cent above the five-year average, while the latter was 26.2 per cent below the five-year average.

Months of inventory, which measures the number of months it would take to sell current inventories at the present rate of sales activity, increased from 2.2 to 3.8. In addition, new housing construction activity was robust, surging 56 per cent year-over-year, with 631 units, according to the Canada Mortgage and Housing Corporation.

Within the New Brunswick real estate market, here is a look at how the four biggest jurisdictions performed:

Fredericton

• Residential Sales: 144
• Residential Average Price: $287,533

Greater Moncton

• Residential Sales: 256
• Residential Average Price: $311,410

Northern Region

• Residential Sales: 146
• Residential Average Price: $159,984

Saint John

• Residential Sales: 152
• Residential Average Price: $267,511

Newfoundland and Labrador

The number of residential properties sold in November plunged nearly 14 per cent, with 532 units exchanging hands. Year-to-date, Newfoundland and Labrador housing sales declined 6.6 per cent year-over-year, totalling nearly 5,900 units.

Prices posted modest gains in November, as the benchmark HPI swelled 6.6 per cent to $280,200, according to the Newfoundland and Labrador Association of REALTORS®. The average sales price of homes in November jumped by more than five per cent to $283,049. All residential property categories posted growth:

• Single-Family: 6.5 per cent to $281,700
• Townhome: +1.9 per cent to $267,800
• Apartment: +16.8 per cent to $234,900

Housing supplies fell in November, with new listings sliding 1.2 per cent and active listings plummeting 30.6 per cent. Moreover, new listings were more than six per cent below the five-year average, while active listings were 41 per cent below the five-year average for November.

Months of inventory also tumbled from 5.6 to 4.5. This is below the long-run average of 10.9 months for this time of the year. And new housing construction was relatively unchanged from November 2021 to November 2022, CMHC statistics noted.

But how did St. John’s perform in November? Here is a summary of what happened in the provincial capital:

• Residential Sales: -3.8 per cent
• Single-Detached: -4.8 per cent
• Benchmark Price: +6.5 per cent to $318,100
• Single-Family: +6.2 per cent to $328,300
• Townhome: +1.9 per cent to $267,800
• Apartment: +17.7 per cent to $234,200

Nova Scotia

The number of homes sold in November declined 28.7 per cent year-over-year, totalling 831 units. During the first 11 months of 2022, residential property sales fell more than 21 per cent, with nearly 12,000 units sold.

Historically, home sales were 17 per cent below the five-year average and just two per cent below the decade for this time of the year, according to data from the Nova Scotia Association of REALTORS®.

Like its regional neighbours, prices held steady in the Nova Scotia real estate market. The benchmark price climbed nearly seven per cent year-over-year to $368,600. The average sales price tumbled 1.9 per cent to $367,104. Despite slowing demand, sales prices increased across all property categories, association numbers highlighted.

• Single-Family: +6.4 per cent to $361,900
• Townhome: +18.1 per cent to $462,400
• Apartment: +10.6 per cent to $428,100

Supplies were mixed in November. New residential listings declined by 15.9 per cent from November 2021, with 935 units. On the other hand, active residential listings jumped by 22 per cent, totalling 2,754 units. At the same time, new and active listings were 11.3 per cent and 31.4 per cent below the five-year average, respectively.

Months of inventory climbed from 1.9 months to 3.3, while new housing construction activity eased 49 per cent in November, totalling 302 units.

How did Nova Scotia housing markets do in November? Here is a summary of what transpired throughout the eastern province:

Cape Breton

• Residential Sales: -3.6 per cent
• Residential Average Price: +13.2 per cent to $212,290

Halifax-Dartmouth

• Residential Sales: +35.5 per cent
• Residential Average Price: +1.2 per cent to $491,978

Northern Nova Scotia

• Residential Sales: -29.1 per cent
• Residential Average Price: +17.3 per cent to $249,858

South Shore

• Residential Sales: -20.7 per cent
• Residential Average Price: -3.3 per cent to $311,459

Yarmouth

• Residential Sales: -46.4 per cent
• Residential Average Price: +11.6 per cent to $251,043

Prince Edward Island

Once again, demand declined in another Atlantic Canada real estate market: Prince Edward Island.

According to the Prince Edward Island Real Estate Association, residential sales declined 22.6 per cent in October, totalling 161 units. In the first ten months of 2022, there were 1,725 units sold, down nearly 16 per cent from the same span in 2021.

The benchmark price for single-family homes advanced by 11.6 per cent to $362,900. However, the average price of homes sold in October dropped 3.2 per cent to $357,521.

Housing inventories were mixed in the Prince Edward Island real estate market, as new listings fell by 18 per cent and active listings jumped by close to 23 per cent. New listings were 7.8 per cent below the five-year average, and active listings were 4.8 per cent above the five-year average. Months of stocks rose to 5.6, up 3.5 months in October 2021. Plus, new housing construction activity improved as housing starts increased by 18 per cent year-over-year, with 108 units, in November, according to the CMHC.

The Atlantic Canada Housing Market in 2023

According to the RE/MAX Canadian Real Estate Outlook (2023) report, here is how some of the biggest Atlantic Canada real estate markets will perform over the coming year:

Charlottetown, PEI

• Sales Price Estimate: 0 per cent
• Unit Sales Estimate: -3 per cent

Fredericton, New Brunswick

• Sales Price Estimate: -3.5 per cent
• Unit Sales Estimate: -6 per cent

Halifax, Nova Scotia

• Sales Price Estimate: +8 per cent
• Unit Sales Estimate: -5 per cent

Moncton, New Brunswick

• Sales Price Estimate: -5 per cent
• Unit Sales Estimate: -8 per cent

Saint John, New Brunswick

• Sales Price Estimate: -3.5 per cent
• Unit Sales Estimate: -6 per cent

St. John’s, Newfoundland and Labrador

• Sales Price Estimate: +4 per cent
• Unit Sales Estimate: -8 per cent

“Halifax is expected to see strong investor activity in 2023 as prices and returns are still attractive, especially compared to other major cities across the country. Amidst inflation, a looming recession and continued adjustments to interest rates, the year is expected to start slow, but pick up its pace in the second half of 2023,” said Ryan Hartlen, broker of RE/MAX Nova, in the report.