Despite housing market forecasts suggesting Atlantic Canada would record significant losses during the real estate downturn, Canada’s east coast has remained strong this year. With prices still edging higher in a time of rising interest rates, a slowing economy and waning consumer demand, industry experts are surprised that places like Nova Scotia or Prince Edward Island are not crumbling under these conditions.
The July market data offered some insight into the state of these provinces, including Nova Scotia’s real estate sector. Indeed, as the Canadian real estate industry maintains its downward trajectory, certain places are bucking the trend and carving their own path in the post-pandemic economy post-boom landscape.
But while the July numbers are crucial, the overall 2022 figures are also worth combing over in this environment. Here is a look at the 2022 Nova Scotia real estate statistics.
A Look at 2022 Nova Scotia Real Estate Stats
It has been a terrific first half of 2022 for Nova Scotia real estate prices. According to the Nova Scotia Association of REALTORS (NSAR), the year-to-date average price, considered more comprehensive than other measurements, advanced 20.5 per cent to $429,855 compared to the same span a year ago.
In July, the MLS® Home Price Index (HPI) rose more than 23 per cent year-over-year to $410,700. In addition, the benchmark price for single-family homes increased 23.2 per cent year over year to $403,800. The benchmark for townhomes jumped nearly 18 per cent to $481,500, while apartment prices climbed close to 30 per cent to 482,000.
On the sales front, demand has waned. In the first seven months of 2022, residential property sales in the Nova Scotia real estate market tumbled at an annualized pace of 18.2 per cent, totalling just under 8,100 units.
Home sales declined by 17.9 per cent in July, totalling 1,167 units. In addition, housing transactions were 12.3 per cent below the five-year average and 0.6 per cent below the ten-year average for this time of the year.
Here is a look at how several Nova Scotia markets have performed in 2022 on a year-over-year basis:
- Residential Sales: -17.2% to 1,204 units
- Residential Average Price: +23 per cent to $351,728
- Residential Sales: -2.8 per cent to 661 units
- Residential Average Price: +14.9 per cent to $230,617
- Residential Sales: -22.8 per cent to 3,817 units
- Residential Average Price: +22.8 per cent to $567,022
- Residential Sales: -13 per cent to 301 units
- Residential Average Price: +32.8 per cent to $301,811
Northern Nova Scotia
- Residential Sales: -14.6 per cent to 1,180 units
- Residential Average Price: +25.5 per cent to $270,396
- Residential Sales: -16.2 per cent to 745 units
- Residential Average Price: +23.9 per cent to $377,139
- Residential Sales: -5.8 per cent to 179 units
- Residential Average Price: +13.3 per cent to $252,018
How Are Housing Stocks Doing in Nova Scotia?
Housing supplies were mixed in the eastern province. Association data show that the number of new listings slid 2.2 per cent, with more than 1,700 new residential listings coming online in July. This represented the lowest figure for this time of the year in 15 years.
Active residential listings jumped approximately 10 per cent, coming in at 3,518 units in July.
New listings were 4.2 per cent below the five-year average, while active listings were 32.6 per cent below the five-year average.
Months of inventory, which gauges the number of months it would take to exhaust current inventories at the present rate of sales activity, rose to three by the end of July, up from 2.3 months a year ago.
New housing construction has been robust and slightly more active than last year. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts surged 51 per cent year-over-year in July, totalling 621 units. Year-to-date, housing starts advanced 12.2 per cent to 2,937 units.
Is the Atlantic Canada Housing Market Poised for a Crash?
By the end of next year, Desjardins Economics projects the average home price in Canada to decline 23 per cent. “Canada’s housing market is correcting quickly, and faster than we anticipated in our downbeat June forecast,” Desjardins said. In a previous forecast, the Montreal-based financial services firm had anticipated a drop of about 15 per cent. But the pace of interest rate hikes, broader market uncertainty, and concerns over a slower economy prompted the financial institution to revise its predictions.
But while industry observers are monitoring the moderation unfolding in British Columbia and Ontario, Desjardins analysts think Atlantic Canada is on track for a sharp correction. The report expects New Brunswick, Nova Scotia, and Prince Edward Island to fall by 29, 27, and 25 per cent, respectively.
“We continue to believe that provinces that saw the biggest price gains during the pandemic are most likely to see the largest price corrections,” the economists wrote.
A lot can happen in a year’s time. Taking a shorter-tern view of the market, RE/MAX Canada’s 2022 Fall Housing Market Outlook anticipates average sales price in Moncton to rise six per cent this fall, Halifax to increase 1.5 per cent, and St. John’s to rise seven per cent. The only decline was expected in Charlottetown, which could see average sale price fall two per cent before the end of 2022.
If there is one market that experienced exceptional and record-setting gains throughout the COVID-19 public health crisis, it would be Atlantic Canada. Time will tell what lies ahead for this part of the country.