Wondering what’s driving the housing price increase in Nova Scotia. The Nova Scotia real estate market recorded an unprecedented boom during the coronavirus pandemic. In the first two years of the public health crisis, house prices soared, and home sales climbed. Conditions slowed in 2022 amid the Bank of Canada’s (BoC) inflation-busting rate hikes. The situation has stabilized since, but the provincial housing sector is still holding firm.
According to the Nova Scotia Association of REALTORS® (NSAR), the MLS® Home Price Index (HPI) rose 4.3 per cent year-over-year in July to $401,000. The average price of homes sold in July advanced more than 14 per cent to $435,239.
Will the upward trend in prices persist? The Canadian Mortgage and Housing Corporation’s (CMHC) Housing Market Outlook from this past spring suggests that the lack of supply of desirable residential properties in Nova Scotia will continue for the rest of the year and heading into 2024.
Meanwhile, an increase in demand for houses can be buoyed by population growth, migration, and bolstered interest in Nova Scotia as a region to live and work in. This interest in the Atlantic Canada province is growing because more people are looking to relocate from busy and congested urban cities to quieter places. Those engaged in remote work are choosing lives outside the urban centres. But this heightened interest can increase demand and result in higher prices. On the flip side, demand for houses in Halifax is also going up. So, buyers are increasingly interested in a blend of major markets and vacation properties.
Nova Scotia is also a popular tourist destination. Therefore, demand for vacation properties or short-term rentals is quite high. This can lead to rising prices in areas with additional tourist attractions and appeal.
A shortage of available homes has been a contributing factor to the jump in residential property prices. Unlike even a few years ago, there are fewer options available in the Nova Scotia housing market, fostering an environment of buyers competing more for scarce stockpiles.
So, when these trends are combined with higher interest rates, buyers might justifiably possess housing affordability concerns. Are you a buyer concerned about rising housing prices in Nova Scotia?
Let’s take a deeper dive into various components that prospective homeowners need to be aware of and what research needs to be done before signing on the dotted line for a detached house in the Maritimes.
What’s Driving the Housing Price Increase in Nova Scotia
Here are several components of the home buying experience you need to be aware of:
It is true that recent property sales, trends in different neighbourhoods, and price changes that can transpire over time can impact your budget. As a result, you must be prepared to handle potential increases in property prices while considering all costs, including mortgage payments, property taxes, insurance, and maintenance. In addition, it would be prudent to determine neighbourhoods in Nova Scotia that align with your budget and preferences.
One of the best decisions you can make during this process is applying for a mortgage pre-approval. By doing this before you begin exploring for properties, you can find out what you can afford, whether it is a buyer’s or seller’s market.
On the topic of mortgages, you need to know that mortgage lenders will have various requirements and criteria, so you must be prepared to meet these standards. This is in addition to the mortgage stress test – 5.25 per cent plus two percent – that you are required to pass.
A key tool in your arsenal is the down payment. By having a hefty down payment, you can improve your chances of being approved for a mortgage.
3.Real Estate Agent
Every buyer and seller must have a real estate agent by their side. Real estate agents know the neighbourhood and can determine the best negotiation strategy when you find a residential property that meets your needs. Moreover, real estate agents understand other aspects of the neighbourhood or home, such as any development and infrastructure plans in the area that can help you determine resale values and any potential issues affecting the property’s value which you can be flushed out by conducting a thorough property inspection.
Patience in the Nova Scotia Real Estate Market
Patience and the ability to make a well-timed decision should not put additional strain on your finances.
Each buyer is unique, with specific needs and requirements. As a buyer interested in property in Nova Scotia, you should thoroughly research the market, work with a reputable real estate agent, and be well aware of your financial situation. These measures will ensure you can understand and successfully manage the rising property prices in Nova Scotia.
In the end, Nova Scotia has been showing stable economic growth, and expectations of increased income levels in this region may attract more buyers and drive up demand and prices. Even though it is projected that Canadian home prices will slip, the decline is believed to be less pronounced in Nova Scotia because of population growth and a tight real estate market.