New Brunswick Housing Market: Appetite for Scenery Is Driving Sales

The once-in-a-century pandemic has led Canadians across the country to reconsider their lifestyles, including their housing situations. Does urban or suburban living hold the same draws that it used to, or it is worth the move to the small down promising quieter living and breathtaking views? One of the most notable trends throughout the COVID-19 public health crisis was the number of Canadians who said “goodbye” to their two-bedroom, 700-square-foot condominiums in the concrete jungle and said “hello” to two-bedroom detached homes near the Atlantic Ocean. The New Brunswick housing market has been a landing spot for many of them.

CBC News recently profiled a Toronto couple who relocated to the Bay of Fundy.

“They’re still very surprised I’m out in the country because they thought, and I thought, I was going to be a city boy my whole life,” Markoshi Baladad, a former Toronto-based nightclub DJ, told the news outlet. “I wanted to retire in Tokyo but for some reason I ended up in rural New Brunswick.”

The twist? They made the move out east a few months before the pandemic, highlighting that young families can move anywhere, as long as they have an Internet connection. But does the data support this anecdotal evidence? Let’s take a look at the numbers in the New Brunswick real estate market.

An Appetite for Scenery Is Driving Sales in the New Brunswick Housing Market

According to the New Brunswick Real Estate Association (NBREA), residential sales in the province surged 7.7 per cent year-over-year in June, totaling 1,319 units. This represented a new sales record for the month of June and the third-highest for any month in New Brunswick’s history.

When looking at the New Brunswick real estate market from a long-term perspective, home sales were 22.9 per cent above the five-year average and nearly 43 per cent above the decade average for June. Year-to-date, housing transactions are up 54.5 per cent from the same time a year ago, with the real estate industry recording 6,650 units.

Prices also surged in June. The MLS® Home Price Index (HPI), which is considered to be more accurate than average and median measurements, climbed 30.9 per cent year-over-year to $245,600. The average price of homes sold advanced 27.8 per cent to $256,418.

All property types enjoyed double-digit growth. The benchmark price for single-family homes increased 30.9 per cent to $247,200. Townhomes experienced a 33.6 per cent spike to $163,200, while condominiums jumped 29 per cent to $212,100.

Here is a June snapshot of the real estate markets in multiple New Brunswick municipalities:

Fredericton

• Residential Sales: 353
• Residential Average Price: $265,758

Greater Moncton

• Residential Sales: 433
• Residential Average Price: $282,060

Northern Region

• Residential Sales: 193
• Residential Average Price: $155,838

Saint John

• Residential Sales: 340
• Residential Average Price: $271,160

Like elsewhere in the Canadian real estate market, supply was a contributor to the strengthening New Brunswick housing market. The number of new listings edged up 9.8 per cent to 1,676. This is 4.4 per cent above the five-year average and 0.9 per cent below the 10-year average. Active residential listings tumbled 27 per cent to a two-decade low of 2,978 units. Active listings were 44.6 per cent below the five-year average and more than 55 per cent below the decade average.

The months of inventory – which measures the number of months it would take to sell current stocks at the present rate of sales activity – was 2.3. This is down from the 3.3 months in June of last year and below the long-run average of 7.9 months.

But new supply could be coming to the New Brunswick real estate market. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts came in at 380, bringing the year-to-date total to nearly 1,400. In June 2020, housing starts were 244, while the first six months of 2020 saw housing starts top 850.

Will Out-of-Province Buyers Still Come to New Brunswick?

In the aftermath of the first wave of the coronavirus pandemic, many households decided to ditch the big cities and look for cheaper alternatives in the suburbs, small towns, and rural communities of Canada. Many Canadian homebuyers even seized the opportunity to snatch up cabins, chalets, and cottages in cottage country. Families were confident that businesses would not be returning to the office anytime soon, so why not facilitate a work-from-home environment with a better view! Now that the COVID-19 public health crisis is winding down and the country enters the other side of the lockdowns, what happens now? Will these cottage and cabin dwellers make the move back to the cities they left behind?

Studies have revealed that a considerable number of professionals are giving employers a choice: keep the remote policies in place or expect a resignation letter. It is unclear if this will have lasting consequences, but it highlights the shifting priorities of those in the workforce. The desire for more freedom is strong and fewer workers are willing to ensure a lengthy, costly commute when they can be just as productive (if not more) from their own homes.

Whatever the case may be, if more companies plan to bring back their workers to the office, will this negatively affect the migration trends to Atlantic Canada? Over the last 16 months, provinces like New Brunswick and Nova Scotia have enjoyed a population growth unseen in decades, much of which comes from Ontario, British Columbia, or Quebec. The next 12 months should be compelling for the Atlantic Canada real estate market with many industry observers eager to see whether New Brunswick, and the  region at large, will sustain migration trends and retain newcomers.

Sources

CREA
CMHC
NPR
CBC News