After a record-shattering 2020, Atlantic Canada has not taken a breather at the beginning of 2021. The current trends within the Nova Scotia real estate market might be proof that the region is extending the momentum from last year amid historically low interest rates and evolving consumer trends. With light at the end of the tunnel in regards to the coronavirus pandemic, the Nova Scotia real estate market, as well as the broader Canadian housing industry, could be getting ready for incredible growth this year. The February numbers show it.
According to the Nova Scotia Association of REALTORS®, residential sales surged 31.9 per cent in February, with 1,045 units changing hands. This is a new sales record for the month of February, beating the previous record that was set back in February 2012. Year to date, home sales have advanced 30.1 per cent in the first two months of 2021, compared to the same period a year ago.
How are prices performing? With low supply and high demand, Nova Scotia real estate prices are going through the roof. In February, the average price of homes sold increased by an astounding 30.4 per cent year-over-year, to just over $340,000.
These trends are expected to continue in the coming months, due to a number of factors. New listings in February tumbled at an annualized rate of 5.8 per cent, to 1,101 units. The number of active residential listings was also down a noteworthy 45.4 per cent, the lowest level in three decades. Months of inventory sat at 2.3 months by the end of February, which is down considerably from 5.5 months at this same time last year. This is also below the long-run average of 10.9 months. Industry observers monitor this metric because it represents the number of months it would take to sell present inventories at the current rate of sales activity.
How are Nova Scotia cities performing? Unsurprisingly, the numbers indicate growth across the board.
Activity Continues to Heat Up in These Nova Scotia Real Estate Markets
Here is a bird’s-eye view of how the real estate markets in the biggest Nova Scotia municipalities performed in February:
- Residential Sales: +39.8% to 130 sales
- Residential Average Price: +36.7% to $256,888
- Residential Sales: -11.1% to 48 sales
- Residential Average Price: +47.9% to $181,827
- Residential Sales: +12.9% to 524 sales
- Residential Average Price: +36.9% to $450,562
- Residential Sales: +186.7% to 43 sales
- Residential Average Price: +2.7% to $197,237
Northern Nova Scotia
- Residential Sales: +100% to 152 sales
- Residential Average Price: +60.4% to $199,245
- Residential Sales: +67.1% to 122 sales
- Residential Average Price: +29% to $265,906
- Residential Sales: +31.9% to 26 sales
- Residential Average Price: +64.5% to $229,841
A Double-Edged Sword in Nova Scotia Real Estate?
The Nova Scotia economy has been one of the strongest in the country over the past year. Experts point to the province’s handling of the COVID-19 public health crisis as a reason why the east coast province has been weathering the storm about as effectively as any place can. Officials were able to get a grip on the situation early by prohibiting travel to other provinces, in tandem with stringent public health restrictions.
But, as the province begins to experience a population influx of move-over homebuyers from across the country, local experts say new homebuyers could be priced out of the market. Kelvin Ndoro, a senior analyst with the Canada Mortgage and Housing Corporation (CMHC), told Reuters that homebuyers who came from major urban centres and sold their homes at a substantial profit possess a lot of equity, which many are using to buy cheaper homes in smaller markets. This is contributing to an increase in housing prices, particularly in smaller local real estate markets across Nova Scotia.
The RE/MAX Halifax Housing Market Outlook (2021) forecast that average residential prices in the province’s capital would increase eight per cent to just below $400,000. The report described Halifax as a seller’s market amid limited supply, strengthening demand and cheaper borrowing costs.
And, based on the numbers, there is little relief in sight. According to CMHC data, Nova Scotia’s housing starts were relatively unchanged in 2020 from the previous two years. Without an infusion of inventory into the Nova Scotia market, growing demand will only lead to tighter market conditions.
Still, Halifax and the broader province are considered to be undervalued Canadian housing markets. If tightened conditions put upward pressure on Nova Scotia’s real estate prices, could this soften demand to more sustainable levels? For now, industry experts are keeping a close watch upon the sizzling provincial market to better understand what to expect throughout 2021 and beyond.
Atlantic Canada’s Time to Shine?
For years, Atlantic Canada had been pushed out of the spotlight by more action-packed urban real estate markets such as Vancouver, Toronto, Ottawa and Montreal. But then the COVID-19 pandemic struck, and the east coast real estate markets were turned on their heads, suddenly becoming one of the most sought-after home-buying destinations in Canada. This shift is fuelling incredible economic growth in the process.
Can Nova Scotia sustain this momentum through 2021, even after its communities transition to a post-COVID-19 state of normalcy? For now, the factors point to continued growth in Atlantic Canada.