Atlantic Canada, despite its infamously unbearably cold winter temperatures, is certainly feeling the heat from its red-hot real estate market! From Charlottetown to Halifax to St. John’s, the nation’s east coast has turned into one of the country’s hottest housing sectors after years of tepid market activity. A growing population, historically low interest rates, strengthening demand, and limited housing supply –a diverse array of factors have propelled the Atlantic Canada real estate market over the past year.
For the first time in decades, Atlantic Canada contends with a critical issue plaguing major urban centres, such as Toronto, Vancouver, or Montreal: housing affordability.
Because prices are soaring to all-time highs in an environment with limited stocks, it is becoming increasingly challenging for prospective homeowners to secure a property. As this coastal Canadian region continues to be targeted by move-up, out-of-town, and first-time homebuyers, the odds of owning a home in a place like Halifax or St. John’s could diminish over time.
So, what are the current price tags on a home in the East Coast? Let’s explore how the Atlantic Canada real estate market capped off 2020, and how the region is expected to perform in 2021.
Affordability Remains Key Issue in Atlantic Canada Real Estate Markets
Temperatures may have taken a dive in December, but prices and sales activity did not cool down.
Based on data from the Nova Scotia Association of REALTORS®, Newfoundland and Labrador Association of REALTORS®, Prince Edward Island Real Estate Association, and the New Brunswick Real Estate Association, here is how the provinces performed throughout 2020, and at the end of the year:
- November Prices: +11.8 per cent to $203,907
- November Sales: +47.4 per cent to 952
- 2020 Prices: +10.5 per cent to $197,604
- 2020 Sales: +11.2 per cent to 9,963
To sum up the performance of the New Brunswick housing market over the past year: record-breaking! From prices to residential sales, the province experienced all-time high prices and transactions for this time of the year, with substantial growth seen in markets across the province, including Fredericton, Saint John, and Greater Moncton.
Newfoundland and Labrador
- December Prices: +6.3 per cent to $282,600
- December Sales: +54.4 per cent to 437
- 2020 Prices: +4.47 per cent to $298,651
- 2020 Sales: +14.7 per cent to 4,684
Listings were mixed to close out 2020. New residential listings were up 5.7 per cent year-over-year in December, while active listings tumbled 21.1 per cent from the same period in the previous year.
- December Prices: +22.3 per cent to $319,726
- December Sales: +37.9 per cent to 899
- 2020 Prices: +13.8 per cent to $291,224
- 2020 Sales: +13 per cent to 13,923
Like its regional neighbour, the Nova Scotia housing market is witnessing a drop in active listings and a jump in new listings. There were 709 new residential listings in December, up 25.3 per cent at an annualized rate. Active residential listings fell 38.9 per cent to 2,676 units.
Months of inventory – the number of months it would take to sell present inventories at the current rate of sales activity – was three, which is well below the long-run average of 12.9 months.
The housing situation could intensify in the months and years to come as new statistics suggest that Halifax is Canada’s second-fastest growing municipality, behind Oshawa, Ontario.
This has Halifax Mayor Mike Savage gloating, recently writing in a statement:
“What’s great about it is it’s primarily immigration driven. We’re not taking people from Yarmouth or Cape Breton, we’re taking people from other parts of the world who can go anywhere in the world, and they’re choosing to come to Halifax.”
Prince Edward Island
- November Prices: +21.2 per cent to $309,301
- November Sales: +32.1 per cent to 177
- 2020 Prices: +18.1 per cent to $280,628
- 2020 Sales: +8.8 per cent to 1,972 units
Once again, there was a gap between active and new residential listings. In November, there were 200 new residential listings, up 27.4 per cent year-over-year. Active residential listings fell 29.6 per cent year-over-year to 589 units in November.
Will the East Coast Face a Deep Freeze in 2021?
While 2020 was a record-setting year for many markets in Atlantic Canada, not all of these cities can replicate this stellar performance. It will be a mix of buyer’s and seller’s markets in the provincial capitals based on early estimates. According to the RE/MAX Housing Outlook 2021, here is what homebuyers could expect to see as they browse for east coast properties:
The Charlottetown housing market is forecast to rise four per cent to about $331,760 across all property types. The housing market is expected to be driven by out-of-province homebuyers, but inventories are anticipated to rebound amid new residential construction projects.
The Fredericton real estate market is projected to favour sellers, with prices gaining as much as four per cent to approximately $196,391 across all property types. Once again, housing supply will be the biggest challenge for Fredericton, exacerbated by demand from out-of-town buyers.
Halifax continues the broader trend in the Canadian real estate market of low inventory levels. As a result, housing prices are predicted to jump eight per cent to about $399,892, buoyed by out-of-province homebuyers. Once again, Halifax might be one of the hottest housing markets in Canada’s real estate sector.
Surprisingly, St. John’s will be one of the few Atlantic Canada markets to experience a downturn, turning into a buyer’s market. Residential real estate prices are forecast to drop as much as three per cent to $285,027. In 2021, first-time homebuyers will be the housing market’s key drivers, with consumers most interested in two-storey detached homes.
Could Atlantic Canada dominate the real estate headlines in 2021? As long as it maintains its upward trajectory, the nation’s east coast will continue to garner much-deserved attention for its impressive growth. It’s fair to say that the region has earned this moment in the spotlight after years of a population exodus, economic stagnation, and a lacklustre housing market. The question remains, for how long can Atlantic Canada maintain this stellar momentum?