Before the coronavirus public health crisis devastated the Canadian economy, analysts and investors were keeping a keen eye upon trends emerging within key Canadian real estate markets, including the Halifax real estate market. For years, parts of the Maritimes suffered from economic stagnation due to high unemployment, capital outflows and a declining population. But in the months leading up to the COVID-19 pandemic, many homebuyers started homing in on the East Coast.
Halifax has been a fascinating city to watch, particularly after the approval of the Centre Plan. In 2017, the municipal government gave the go-ahead to an initiative that would improve the development of Halifax’s urban core. The campaign would lead to expanded public transit, new commercial and residential buildings, new and buried utility lines, and pedestrian-friendly walkways. The efforts are expected to attract businesses and workers from across the country and around the world.
With it, of course, would come a booming real estate market. In line with the Plan’s projections, Halifax is witnessing an economic resurgence, and this could only be the beginning.
Halifax Real Estate: A Top Canadian Market to Watch
In August, the Halifax-Dartmouth housing market experienced a 20.3-per-cent year-over-year increase in residential sales, with 769 transactions reported by the Canadian Real Estate Association (CREA). The residential average price also surged 18.2 per cent to $372,982 in August.
Year-to-date sales activity in the region was down 1.1 per cent in August, with 4,693 homes trading hands. However, Halifax home prices have still climbed 11.6 per cent to an average of $356,687.
This is a continuation from what has been occurring in the aftermath of the COVID-19 outbreak, with homebuyers scooping up properties at a rapid rate.
Housing experts anticipate these bullish trends will persist heading into the fall. According to the RE/MAX Fall Market Outlook Report, the inventory shortage and increased demand will boost average housing prices in Halifax by 10 per cent during the remainder of 2020.
In Halifax and across Nova Scotia, as demand continues to blossom, industry observers are warning that supply will continue to fall, which has sparked concern among federal officials. Andy Fillmore, the Member of Parliament for Halifax and a former city planner, says that the housing shortage could soon price too many Halifax homebuyers out of the market.
“If we want to have a city that reflects the full diversity of everyone who lives in our city … we have to put in place mechanisms so that we can have the diversity of income earners … especially when it comes to folks who traditionally lived in those areas and find themselves being priced out,” said Fillmore in an interview with CBC News, adding that all three levels of government and the private sector need to devise a plan to address this problem.
With interest rates being as low as they are, developers might take advantage of the ultra-low borrowing costs and invest in new housing developments. Fillmore did also say that municipal governments can modify zoning regulations, something that could stimulate new supply. Until then, the Halifax housing market could be tighter for the next 12 months, which would translate to higher valuations.
During this time, experts say it is also important to keep an eye on mortgage deferrals, says Kean Birch, an associate professor at York University.
“I find it worrying that housing prices are continuing to rise. The reason being that we don’t know what’s going to happen once the mortgage payment deferral ends, and the consequences actually could be dramatic across the board. And it could be highly inequitable as well,” said Birch in an interview with Halifax Today.
Is Atlantic Canada the Next Real Estate Hotspot?
Is Atlantic Canada finally catching a break? For a long time, the Maritimes had endured economic stagnation, capital flight, and a sliding population. This could be changing now, based on the latest real estate data. Housing prices are soaring, the jobs are coming back, and economic development is accelerating. In these respects, the good times are returning to Halifax, St. John’s, Charlottetown and Fredericton.
But the momentum of this upswing will hinge on what happens over the next few months. Although the consensus is that Halifax and the rest of Atlantic Canada will still record strong housing numbers, fears over the second wave of the coronavirus and general uncertainty could weigh on the real estate market as we head into the last quarter of 2020.