By now, many people observing the Canadian real estate market know how Halifax real estate and the broader Atlantic Canada housing sector have ballooned in the last few years, thanks to the pandemic-era policies and trends. From a population bomb to an improving economic landscape, Nova Scotia and its surrounding Maritime provinces have enjoyed incredible growth.
But does it persist? This is the question that some might have if they have not paid attention to the latest numbers as of late. Moreover, will there be a homebuying opportunity heading into 2024?
These questions – and other similar ones – can be answered by looking at the latest real estate association data, particularly in Halifax and the broader provincial housing industry. Let’s take a deep dive into the most recent statistics available.
Are Halifax House Prices Dropping?
In the Nova Scotia housing market, residential property sales tumbled 1.1 per cent in October, totalling just ten units, according to the Nova Scotia Association of Realtors (NSAR). Home sales were nearly 24 per cent below the five-year average and 13 per cent below the 10-year average for this time of the year. In the first 10 months of 2023, home sales plunged 19 per cent year-over-year, with close to 9,000 units exchanging hands.
Prices have done exceptionally well. The MLS® Home Price Index (HPI), which gauges price trends more accurately than average or median price measurements, increased more than nine per cent year-over-year to $402,500 in October. The average price of homes sold in the province surged by an annualized pace of 8.4 per cent to $419,717.
Now, how does this compare to the Halifax real estate market?
NSAR numbers show that residential property sales in the Halifax real estate market climbed nearly nine per cent year-over-year, totalling 427 units. The average residential property increased close to three per cent to slightly above $531,000.
So, no, Halifax housing prices are not falling.
However, conditions have been on a downward trend for much of the year, with residential property sales in Halifax dropping 16 per cent, totalling 4,260 transactions. The average sales price for a home in Halifax has risen two per cent to $559,583.
Across the province, supply has improved, with new and active residential listings skyrocketing 20.4 per cent and 14.1 per cent, respectively. New inventory could be coming online in the Halifax real estate market as housing starts spiked 760 per cent from October 2022 to 653 units, according to fresh data from the Canada Mortgage and Housing Corporation (CMHC). In the first ten months, there have been 3,470 housing starts, up seven per cent from a year ago.
Will the Strength Persist in 2024?
Next year’s forecasts for the Atlantic Canada real estate market suggest mixed conditions throughout the nation’s seaboard.
TD Economics anticipates smaller sales and price drops in New Brunswick and Nova Scotia but rising prices in Newfoundland and Labrador. New Brunswick will enjoy stellar housing affordability, the bank’s economist stated.
“Elsewhere, smaller declines will likely be recorded in New Brunswick, Nova Scotia, PEI, and Quebec. By mid-year in 2024, each of these six provinces should be seeing rising sales and prices, although gains will be limited by difficult affordability. In fact, excluding New Brunswick, we estimate that affordability will remain near historical worsts (spanning back to 1988) in all of these regions over the next few quarters,” said TD economist Rishi Sondhi in an October research note.
“In contrast, the Prairies and Newfoundland and Labrador are likely to see rising prices over the forecast horizon, as relatively favourable affordability conditions keep sales levels elevated.”
Here is a breakdown of what is expected next year and in 2024 in the Nova Scotia real estate market:
- Home Sales: +4.1 per cent
- Home Prices: +2.7 per cent
- Home Sales: +15.6 per cent
- Home Prices: +2.5 per cent
Now, this is vastly different from what Mortgage Professionals Canada (MPC) and Oxford Economics are predicting. In 2024 and 2025, they are forecasting a house price drop of seven per cent and ten per cent, respectively.
“Quebec is projected to experience the most significant decline in housing starts, followed by the Atlantic provinces and the Prairies,” the MPC-Oxford report stated. “Over the rest of the decade, we forecast housing starts to exceed historical levels in the Atlantic Provinces, Prairies, and Ontario, while the other Canadian regions will continue to experience a downturn in growth.”
On the other hand, mortgage brokerage firm Pine anticipates Halifax real estate prices will continue to jump. The number of homes for sale is expected to be low.
Monetary Policy and Halifax Real Estate
The Bank of Canada (BoC) is widely anticipated to cut interest rates next year as inflation cools and the Canadian economy slows. Of course, monetary policy functions with a lag, so the central bank’s tightening efforts are still travelling through the marketplace. Conversely, rate cuts would still take time to venture across the economy. Whether this will support or hinder the Halifax real estate market remains to be seen.