The Nova Scotia real estate market is leading the Atlantic Canada housing boom.
After about three decades of stagnant economic growth, a population exodus and a quiet real estate market, Canada’s eastern seaboard is experiencing enormous growth on many economic fronts. The most notable gain in this part of the country, including Nova Scotia, has been the housing sector.
In February, the average sales price for a residential property in Nova Scotia surged at an annualized rate of 23.6 per cent to an all-time high of $422,100, according to the latest numbers from the Nova Scotia Association of Realtors (NSAR). Falling new and active residential listings and months of inventory have led to remarkable gains in the provincial housing market.
But while Nova Scotia real estate is sizzling, hot conditions are pricing many locals out of the market. Although valuations are lower than the national average of $820,000, current prices leave many wishful homebuyers sitting on the sidelines. But there is hope for prospective homeowners, in the form of the provincial down payment assistance program.
How Much of a Down Payment Do I Need for a House?
The minimum down payment is five per cent for homes prices at $500,000 or less in Canada. For properties priced over $500,000, you’ll need five per cent of the first $500,000 and then 10 per cent on the remaining sum.
Because the typical price for a single-family home in Nova Scotia is approximately $420,000, you would only need about five per cent, or about $21,000, which can still pose a challenge in this post-pandemic economic environment. Is this too much money, or is this doable? It depends on your situation.
Down Payment Assistance in Nova Scotia
If you have trouble putting together a down payment for a house in Nova Scotia, you can always take advantage of the Down Payment Assistance Program (DPAP) that helps middle-income residents to purchase their first home.
Those who apply and qualify can receive an interest-free repayable loan of up to five per cent of the home’s purchase price. But there are rules that you need to follow to be eligible.
The first is that the purchase price cannot exceed $300,000 in Halifax and $200,000 in the rest of the province. The property must also be the buyer’s primary residence.
Another rule is that households participating in the program must have good credit and be pre-approved for an insured mortgage from a recognized financial institution. The participant must also be a first-time homebuyer.
The loan must go toward the mortgage and not the other fees and costs related to buying the home.
Here are some other requirements potential applicants need to be aware of:
- Applicant must not have the financial means to pay five per cent of the purchase price.
- Total household income must be less than $75,000.
- Applicant must have resided in Nova Scotia for at least 12 months.
“The program is based on a first-come, first-served basis. Unused monies in any area may be redistributed if take up is not on target in any of the four regions,” Housing Nova Scotia writes on its website.
Can this program assist many families in finally achieving the Canadian dream of owning a home?
What is the Future of Housing in Nova Scotia?
The Nova Scotia real estate market continues to flourish. Although market activity has cooled considerably over the last month, experts agree that a lack of supply has been the main contributing factor. Until inventories are restocked, the entire Atlantic Canada region will likely see notable price growth that could continue to leave more locals unable to purchase a single-family home.
In Halifax, for example, the sale price for the typical home is forecast to grow 17 per cent this year, according to the RE/MAX 2022 Canadian Housing Market Outlook Report. The number of sales is projected to climb 3.5 per cent. Meanwhile, Southern Nova Scotia prices are expected to rise 10 per cent, with sales activity potentially increasing by five per cent.
What’s more, investors are showing signs that there is no slowdown on the horizon. A recent Bank of Canada (BoC) study found that investors represented approximately one-fifth of home purchases in Halifax in the second quarter of 2021, close to the national average of 21.6 per cent in the same period.
With more Canadians flocking to the east coast, there will be strong demand for many more months and perhaps years to come. But can Nova Scotia and its neighbours sustain this momentum in the future?