Canadians have had to deal with a lot of change over the past few months. The global pandemic has affected all parts of our lives, and we have been forced to keep our social distance and change the way we live and work in order to keep ourselves and our loved ones safe. We have seen shifts in the economy as well as in the Canadian real estate market, and there has been a lot of uncertainty felt by potential homebuyers and sellers on whether now is a good time to engage in the market.
As the capital of the province of Nova Scotia, Halifax offers a unique blend of rural and urban landscapes that attracts tourists from all over the world as well as those looking to settle down permanently. Considering the gorgeous beaches, scenic villages and affordable cost of living, it is not hard to understand why. If you are considering entering the Halifax housing market, you may be wondering what to expect in light of the uncertain times we’re currently in.
The RE/MAX Halifax Housing Market Outlook predicted a seller’s market in 2020, due to low housing inventory. Younger buyers were eager to purchase detached, single-family homes due to good housing affordability, and Halifax continued to attract foreign buyers and homebuyers from other regions of Canada.
Effects of the Pandemic on Halifax Housing Market
Halifax normally enjoys a large influx of tourists, especially in the summer. However, this summer is likely to look a little different as social distancing measures continue to be in place for the foreseeable future. With a decline in the number of tourists, businesses and residents of Halifax will feel the financial effects, leading to the possibility that some people may be unable to afford mortgage payments or a down payment on a home.
Prior to the pandemic, there had been an increase in the number of families immigrating to Halifax every year. However, with the closures of many countries’ borders, immigrant entry has been impacted, hence the drop in home purchases by immigrants.
Although the pandemic will result in fewer tourists and a decrease in spending power for some Halifax residents, the residential real estate market should remain relatively stable thanks to lower mortgage rates and low housing inventory.
Adapting to the New Normal
The global health crisis has forced real estate markets around the world to adapt in order to continue to function, and the Halifax housing market is no exception. Halifax real estate agents have been tasked to come up with new ways to do business, such as setting up virtual tours, video chats and online floor plans.
While these new measures do make it possible to continue to buy and sell homes, some residents who still feel uncomfortable may decide to delay buying or selling their new home for the time being.
Higher Demand for Homes
The average price for a home sold in June in Halifax-Dartmouth is up 13.3 per cent compared to a year ago, with the average selling price for homes in Halifax at $366,243. Because of a shortage of housing supply, there is a higher increase in demand.
According to the Nova Scotia Association of Realtors, supply in Nova Scotia is at the lowest level seen in over 15 years, and inventory continues to decline. There were 4,398 active residential listings at the end of June, down 35.5 per cent from the end of June 2019.
Housing Market Weathering the Storm
Despite predictions that Canadian real estate prices could fall between five and 10 per cent this year versus last year, a dramatic decline in prices is unlikely. Before the pandemic hit, Halifax was experiencing a hot market. Low housing inventory led to multiple-offer scenarios that continue to persist.
In the month of May, about one-third of Halifax listings sold over asking price, which could lead to an increase of home prices. There is an increase in the number of showings as well as new listings which is a good sign that a large drop in home prices is probably unlikely.
Those looking to sell their homes in Halifax will be happy to know that it is a seller’s market due to low housing inventory levels and steady buyer demand. The expectation is for livability to improve in Halifax in the coming years, with new construction developments underway to balance out population growth.
Are you looking to buy or sell in Halifax? Make sure to work with a professional Realtor who can help you properly navigate the real estate market during this unusual time.