For years, Atlantic Canada had been buried in the doldrums of the nation’s economy, triggering a large exodus of both people and capital. The economic prospects of the region had been dulled for so long, and with the COVID-19 public health crisis shaking the Canadian economy, it would seem all hope is lost. As the saying goes, nothing is what it seems.
According to a new report by the Business and Development Bank of Canada (BDC), the region is unlikely to experience a severe economic downturn in the fallout of the coronavirus pandemic. Since Atlantic provinces of Nova Scotia, New Brunswick, and Prince Edward Island reported fewer COVID-19 cases than the rest of the country, Atlantic Canada was not forced to impose full lockdown measures. Although it anticipates a 6% drop in the gross domestic product, this estimate is smaller than anywhere else – and the rebound is just getting started.
One of the biggest beneficiaries of this positive development? The Maritimes’ real estate market.
Before the public health crisis swept the country, Atlantic Canada’s housing market had been one of the strongest real estate industries outside the major markets like Vancouver, Toronto and Montreal. The RE/MAX Atlantic Canada Market Report in 2019 revealed that prices were up in 75 per cent of the area, driven by first-time homebuyers and low inventory levels.
Has your interest been piqued? If so, read on to learn more about the best markets in the east in 2020.
The Hottest Housing Markets in Atlantic Canada
Here are four of the hottest markets in Atlantic Canada:
As of late, the moniker in Halifax, Nova Scotia has been “slow and steady wins the race.” While Halifax has not experienced a massive development boom like Toronto or Vancouver, virtually every facet of the economy has seen an improvement in recent years. Residential real estate, commercial investment, record job creation and higher immigration levels – the situation unfolding in Halifax has never been better.
In the coming years, industry experts forecast a housing boom because future population growth is expected to increase demand for housing, whether it is single-family homes or purpose-built rental complexes. This will be further fuelled by financing that is already widely available, and low borrowing costs thanks to the Bank of Canada (BoC) cutting interest rates to historic lows at the height of the pandemic.
One thing that will undoubtedly make Halifax even more appealing is its Centre Plan, an initiative that would permit developers to construct bigger towers in the downtown core. When this happens, watch out!
PEI real estate has become one of the hottest markets in the country. More specifically, the province’s capital, Charlottetown, is sizzling! In 2019, the province saw prices spike as much as 38.5%. Could the same trends continue in 2020 and beyond? According to Canada Mortgage and Housing Corp.’s (CMHC) market outlook from last year, the level of housing starts had been anticipated to decrease in 2020 and 2021. Plus, a separate Statistics Canada study highlighted sharp increases in the value of building permits and building investment in Charlottetown and across the province.
Put simply, record low vacancy rates and a tighter housing market will likely be crucial elements for Prince Edward Island and its capital. And, since the province did not go into full lockdown mode, it will likely fare better in the months to come, compared to its neighbours nationwide.
At the start of the year, Fredericton, New Brunswick looked like it was on pace for another record-breaking year. In 2019, home sales witnessed their best gains in about a decade, with housing prices skyrocketing and housing levels falling. Starter homes had been one of the biggest factors in residential real estate.
Fredericton has long been considered a seller’s market, but how long this will last is anybody’s guess. Commercial and residential real estate investment is beginning to take shape across the city.
The prospects in St. John’s, Newfoundland and Labrador are optimistic. Prices are forecast to remain low in the short-term compared to St. John’s municipal counterparts, but industry observers expect an increase over the next several years. The primary factors that would drive the market would be improving labour conditions, lower unemployment rate, and more construction projects amid lower borrowing costs.
Overall, St. John’s will be a buyer’s market for the next couple of years, making it an appealing destination for newcomers and first-time homebuyers. It also helps that it has been named the second most affordable home market in Canada!
Despite CMHC publishing a grim assessment of the Canadian housing market that was contested by industry professionals, a new poll found that many believe the market will bounce back a lot quicker than originally anticipated. According to a new RE/MAX Canada survey, 56 per cent of respondents plan to engage in the real estate market within less than a year, and 44 per cent project the market will return to pre-pandemic levels by next year. For those who have wanted to dip their toe into the Atlantic real estate pool, either as a homeowner or an investor, now could be an opportune time. In the meantime, keep your down payment ready and add more to it as best as you can if you want to keep pace with these sizzling markets. Happy house hunting in the east!