Population growth, affordability, and a stable interest rate environment have fuelled home-buying activity throughout Halifax-Dartmouth during the first quarter of 2019.
Overall, Atlantic Canada is poised for strong housing market performance in 2019 as economic performance ramps up, unemployment rates decline, and first-time buyer incentives at both provincial and federal government levels take hold, according to the RE/MAX 2019 Atlantic Canada Housing Market Report. The report found strong momentum in the larger urban centres, as well as spillover into several smaller markets. Home sales are on par or up in just under half the markets surveyed (7/15), likely due to the current shortage of inventory, while housing values have climbed in almost three-quarters (11/15) of the Atlantic Canadian markets surveyed.
While unit sales were on par with figures reported one year ago (1,117 versus 1,118), the average price of a home in Halifax-Dartmouth rose almost six per cent to $318,977 in Q1, up from $302,400 during the same period in 2018. Tight inventory levels, especially at the $300,000 to $350,000 price point, contributed to the upward momentum, with a number of communities reporting the lowest number of active listings in recent years. Those areas include North End Halifax, Downtown Dartmouth, Fairview, Colby Village, Manor Park and Sackville. Much of the upswing in the market can be attributed to immigration and net positive migration from other provinces. Eleven consecutive quarters of positive net interprovincial migration have been reported in Nova Scotia, according to a recent RBC economic forecast, with the second half of 2018 posting the largest increase in over 30 years.
Halifax-Dartmouth has benefitted from an influx of younger buyers with ties to Atlantic Canada, many of whom are moving back from Ontario, British Columbia, and Alberta, to take advantage of the more laidback lifestyle and attractive housing values. Millennials are an active component in the Halifax-Dartmouth housing market, now comprising one in every five residents. Urban living resonates with this segment of the market. Demand, as such, has been climbing for prime real estate in older neighbourhoods offering unique, oddly-configured wartime properties at affordable prices. The lower price point typically allows buyers to complete extensive renovations, putting their own unique stamp on the property. Multiple offers are commonplace under the $300,000 price point as first-time buyers vie for starter product. Changes to the Home Buyer’s Plan introduced in mid-March, raising the maximum withdrawal amount to $35,000, are expected to further bolster first-time home-buying activity.
Strong demand for starter homes is spurring move-up activity at higher price points, with sales on the upswing in the $400,000 to $550,000 price range as well. The luxury segment — homes priced in excess of $750,000 – is especially brisk, with 33 properties changing hands in the first quarter of 2019, up from 27 during the same period last year. With all segments of the market operating in tandem, the outlook is bright for Halifax-Dartmouth in 2019. After a short lull, new condominium and rental construction has sprung back to life. Vacancy rates in the city have softened considerably (1.6 per cent in October, 2018), despite the growing number of units coming on-stream. While commercial construction has slowed in Halifax-Dartmouth, the completion of the new World Trade Convention Centre has attracted some key tenants and has brought a number of large conferences to the city. Job creation efforts underway in the city have effectively reduced the unemployment rate to 4.9 per cent (February, 2019).
There is room for further growth in Halifax-Dartmouth, with homeownership rates hovering at 60.1 per cent, well under the national average. Given solid economic fundamentals, residential unit sales and average price in the city are expected to escalate, rising between two and three per cent by year-end 2019.