Strong housing market performance expected for Atlantic Canada in 2019
The housing market throughout much of Atlantic Canada is poised for solid growth 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 a report released today by RE/MAX of Ontario-Atlantic Canada Region.
The RE/MAX Atlantic Canada Market Report examined residential real estate trends and developments across 15 markets for the first quarter of 2019, and compared them to the same period one year earlier. The markets surveyed were: St. John’s (CMA), Deer Lake/Corner Brook, and Clarenville (including the surrounding areas) in Newfoundland and Labrador; Halifax-Dartmouth, the Annapolis Valley/Yarmouth, Kings County, Truro and Cape Breton in Nova Scotia; Charlottetown and Summerside in Prince Edward Island; and Saint John, Miramichi/Miramichi Rural, and Greater Moncton in New Brunswick.
The report found strong momentum in the larger urban centres, as well as spillover in 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.
Atlantic Canada Housing Market Highlights
- First-time buyers were a driving force in almost 70 per cent of markets surveyed. (10/15)
- Low inventory levels were reported in 80 per cent of markets. (12/15)
- Home sales were strongest at starter price points ranging from $100,000 to $300,000.
- Buyers from other parts of the country were active in 60 per cent of Atlantic Canada housing markets. (9/15)
- Newfoundland and Labrador and New Brunswick are seeing an influx of people returning home after working in Alberta’s oil sector.
- Luxury sales were up in Halifax-Dartmouth, Saint John and Kings County.
Consumer confidence is on the upswing in Atlantic Canada and that is translating into stronger home-buying activity in residential real estate markets. First-time buyers – many of whom are Millennials – are behind the push for housing, with many seeking to capitalize on the low interest rate environment along with provincial government assistance programs before values climb. –Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada Region
Assistance programs introduced by provincial governments in Atlantic Canada in an effort to support home ownership are no doubt behind the surge in first-time homeowners. Targeting first-time buyers, these programs range from repayable loans of up to 40 per cent for an existing home (New Brunswick’s Home Ownership Program) to government grants of $3,000 for qualifying individuals or families (Newfoundland and Labrador’s Home Purchase Program). Also making home ownership more attractive, the federal government recently announced changes to its existing Home Buyer’s Plan, allowing first-time buyers to withdraw $35,000 (up from $25,000) from their Registered Retirement Savings Plans to finance the purchase of a home. The federal budget also included a proposed Canada Mortgage and Housing Corp. (CMHC) equity loan designed to provide financing of up to 10 per cent on new homes and five per cent on existing homes.
Larger Atlantic centres were first to respond to the stimulus and demand for affordably priced homes continues to build. St. John’s, Saint John, Greater Moncton and Halifax-Dartmouth all reported year-to-date sales for the first quarter of 2019 were on par or ahead of 2018 levels. The situation in Charlottetown was somewhat different, with exceptionally tight market conditions responsible for fewer sales in the first three months of the year. The ripple effect is spreading to smaller centres in PEI, placing pressure on both inventory and values.
Supply issues were reported in 80 per cent of markets surveyed, with starter homes at affordable price points being most sought-after. This was especially so in areas that have a price ceiling associated with home-ownership assistance programs. An example would be in Nova Scotia, where the province will provide down-payment assistance for first-time buyers who qualify on homes valued at up to $150,000 outside of Halifax-Dartmouth and up to $280,000 within the Halifax Region Municipality.
“These programs are breathing new life into smaller communities, and demand has outpaced supply, leaving realtors scrambling to find new listings for their clients,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada Region. “In some cases, first-time buyers are vying against out-of-province buyers for product.”
Population growth has also factored into the mix, with immigration and in-migration having an impact on housing across Atlantic Canada. According to Statistics Canada 2016 Census Profiles, 10 out of the 15 markets RE/MAX examined are experiencing an increase in local population. Nowhere is the uptick more evident than in Prince Edward Island, where inventory has fallen to its lowest level since 2003.
“The Atlantic Region traditionally has the highest rates of home ownership in the country and we don’t expect that to change anytime soon,” explains Alexander. “Greater economic prosperity (the Maritimes are expected to lead the country in GDP growth in 2019), combined with interest rate stability and first-time buyer incentives are tipping the scales in favour of home ownership yet again.”
Lastly, the landscape has changed for homebuyers in Atlantic Canada. Millennials now represent approximately one in five residents in major centres such as St. John’s, Moncton, Saint John, Charlottetown, and Halifax-Dartmouth. Given that statistic, Alexander says “you can bet this trend with continue for the remainder of the year and beyond.”
Atlantic Canada Housing Market Regional Summaries
MIRAMICHI & MIRAMICHI RURAL, NEW BRUNSWICK
Home-buying activity in Miramichi and Miramichi Rural continues to gain strength heading into the traditional spring market, with first-quarter sales showing double- and triple-digit gains over year-ago levels. Looking ahead, 2019 home sales and prices are expected to rise.
MONCTON, NEW BRUNSWICK
Driven by strong demand and limited supply, Greater Moncton home sales in the first quarter area eclipsed last year’s levels, rising seven per cent year-over-year.
FREDERICTON, NEW BRUNSWICK
Fredericton’s housing market kicked off with a bang in the first quarter, with home sales hitting a nine-year high in March 2019, up 33.6 per cent from 2018. This marks the second-best start for sales in any year on record in the region.
SAINT JOHN, NEW BRUNSWICK
An influx of much-needed inventory is expected to return Saint John’s housing market to more balanced conditions in the coming months. Home sales in the first quarter of 2019, rising in lockstep with average prices. Low housing inventory has prompted urgency among homebuyers, with sellers reaping the rewards.
TRURO, BIBLE HILL & AREA, NOVA SCOTIA
Truro’s affordable housing stock continues to draw home-buyers from across the province, with the number of homes sold in the first quarter of 2019 up a substantial 15 per cent over 2018 levels for the same period.
CAPE BRETON & AREA, NOVA SCOTIA
A large influx of international students in late 2018 prompted a significant increase in demand for housing in Sydney and the surrounding areas during the first quarter of 2019.
HALIFAX & DARTMOUTH, NOVA SCOTIA
Population growth, affordability, and a stable interest rate environment have fuelled home-buying activity throughout Halifax-Dartmouth during the first quarter of 2019.
KINGS COUNTY, NOVA SCOTIA
A bustling economy, housing affordability and an extended period of good weather have contributed to solid home-buying activity throughout Kings County to kick off 2019.
ANNAPOLIS VALLEY & YARMOUTH, NOVA SCOTIA
Retirees continue to flex their muscles in the Annapolis Valley and Yarmouth, dominating home-buying activity and prompting an increase in average home price across Western Nova Scotia in the first quarter of 2019.
CHARLOTTETOWN, PRINCE EDWARD ISLAND
Homes in Charlottetown and surrounding areas have experienced average price increases in the first quarter of 2019, with severely low inventory pumping the brakes on residential sales.
SUMMERSIDE, PRINCE EDWARD ISLAND
Affordable housing is in high demand in Summerside and the Prince County area, and a shortage of listings has hampered sales activity in the first quarter of the year.
ST. JOHN’S, NEWFOUNDLAND & LABRADOR
While buyer’s market conditions prevailed in St. John’s in the first quarter, an increase in home sales in the first quarter of 2019 in indicating a seller’s market in the city and surrounding areas.
DEER LAKE & CORNER BROOK, NEWFOUNDLAND & LABRADOR
Inclement weather had a significant impact on home-buying activity in Deer Lake and Corner Brook, with home sales down in the region in the first quarter of 2019.
CLARENVILLE & SURROUNDING AREAS, NEWFOUNDLAND & LABRADOR
First-time buyers are expected to take advantage of ideal housing market conditions in coming months as greater affordability and newly introduced government incentives prop-up home-buying activity in Clarenville and the surrounding areas.