Prospective Homeowners and Renters Struggle in Hot Halifax Housing Market

The Halifax real estate market has been one of the hottest housing sectors in both Atlantic Canada and the rest of the country. The tremendous growth in sales activity and prices could be one of the lead contributors to Halifax transforming into an economic hub in the country’s eastern seaboard.

But is this enormous growth leaving too many homebuyers and renters on the sidelines?

For many years, Halifax and its regional neighbours had enjoyed housing affordability. After 20 months of monumental gains during the coronavirus pandemic, the Halifax housing industry has gone through an overhaul, and it could prevent a lot of young families and households from achieving the Canadian dream of home ownership.

With that said, is the Halifax housing market really as hot as it has been purported? The data present remarkable numbers, suggesting that it is poised to be a major economic centre in the Great White North.

How the Halifax Real Estate Market Performed in September

According to the Nova Scotia Association of REALTORS® (NSAR), residential sales in the Halifax real estate market tumbled 31.7 per cent year-over-year in September, totalling 566 units. However, despite the decline in demand, the average residential price advanced 22.9 per cent to $471,746.

In the first nine months of 2021, residential sales rose 11 per cent compared to the same time a year ago, totalling more than 6,200 transactions. The average year-to-date price climbed 27.5 per cent to $460,172. Year-to-date, residential sales in the Nova Scotia housing market picked up 23.9 per cent to 12,606 units. The average residential price soared 24.8 per cent to $355,755.

In comparison to the rest of the province, residential sales fell at an annualized rate of 19 per cent, while average prices jumped 17.3 per cent to $356,757.

Inventory is perhaps the most significant issue facing both Halifax and the broader province. The number of new listings dropped 19.5 per cent year-over-year to 1,387 units, while active residential listings plummeted 28.4 per cent to 2,866 units.

The months of inventory, which gauges the number of months it would take to exhaust current housing stocks at the present rate of sales activity, numbered 2.2 at the end of September 2021. This is down from the 2.5 months at the end of September.

Prospective Homebuyers and Renters Struggle in Hot Halifax Housing Market

It has been widely reported that the Maritime municipality’s real estate boom had left renters and prospective homeowners in the lurch. This has led to rather unconventional house-hunting strategies.

Global News recently spoke with a Halifax renter, who had been forced to take out an eight-month lease and rent a hotel room for $1,300 per month. Others interviewed by the cable news network reported feeling dejected, conceding that it would be nearly impossible to buy a home.

But what is the solution? It depends on who you talk to.

Nova Scotia Premier Tim Houston wants to scrap two-per-cent rent controls in 2023. The new premier has also proposed $35 million be allocated to affordable housing to create 1,100 new spaces, while enhancing protection from so-called renovictions.

Ultimately, for the provincial leader, it is about creating new supply. “We really need new housing stock in this province. That is how you solve the housing crisis,” he told reporters in September.

Real estate agents are calling for the province to remove, at least temporarily, Nova Scotia’s land transfer tax, which is 1.5 per cent for homes in the Halifax area.

Whatever the case, Fiona Traynor, an employee at Dalhousie Legal Aid Service, labelled the province’s new measures a “big victory” for renters.

“I think it shows that the provincial government recognizes the entrenched housing crisis that people are living through, and they’ve done something about it that secures people’s future for the next three years,” she told CBC News.

But, as more Canadians migrate east to Atlantic Canada, there could be greater demand for a housing market that is already witnessing tight inventories. According to the Canadian Real Estate Association (CREA) and Nova Scotia Migration, nearly 10,000 people relocated to the eastern province in the second quarter, up 55.5 per cent from the same time a year ago.

How will the housing sector respond? All indicators point to housing construction becoming more common in Nova Scotia.

“The construction and finance, insurance and real estate (FIRE) industries are making solid contributions to over-all economic activity,” TD Bank noted in its quarterly provincial forecast in September. “The former is being buoyed by strong housing construction and the government’s commitment to spend $1.2 billion on capital projects, while the province’s heated housing market has helped FIRE employment increase by five per cent year-to-date.”

Plus, according to the Canada Mortgage and Housing Corporation (CMHC), housing starts have topped 2,100 year-to-date, with completions also numbering more than 2,100.

Will Halifax’s Housing Market Momentum Continue?

The average home in Toronto costs buyers more than $1 million. Nationally, the average residential price of a property is about $700,000. In Halifax? The average price of a home sold in Nova Scotia is at least half compared to the rest of the country. Halifax is quickly becoming a significant economic hub with provincial capital supporting an economic transformation, whether through public works projects or private-sector capital investments.

Suffice it to say, given its comparable affordability and growing economic centres, Halifax could maintain this historical growth in the local real estate market.

Sources:

• CBC News
• Global News
• CMHC
• NSAR