Are Halifax House Prices Dropping?
Discovering the Canadian real estate market’s evolution, especially in Halifax and the broader Atlantic Canada housing sector due to pandemic-era policies and trends, has drawn considerable attention. Nova Scotia and the surrounding Maritime provinces have witnessed remarkable growth, attributed to factors like population surges and an improving economic landscape.
However, some may wonder if this growth will continue and if there will be opportunities in homebuying in 2024. Analyzing the latest data from real estate associations, particularly focusing on Halifax and the provincial housing industry, sheds light on these queries.
Halifax House Prices Update
In the Nova Scotia housing market, residential property sales fell by 1.1 percent in October, totaling only ten units, according to the Nova Scotia Association of Realtors (NSAR). Comparatively, home sales were nearly 24 percent below the five-year average and 13 percent below the ten-year average for this period. Over the initial ten months of 2023, home sales declined by 19 percent year-over-year, with almost 9,000 units changing hands.
However, prices continued to rise. The MLS® Home Price Index (HPI), a more accurate measure of price trends, showed a more than nine percent year-over-year increase, reaching $402,500 in October. The average price of homes sold in the province surged at an annualized pace of 8.4 percent, hitting $419,717.
Comparing these figures to the Halifax real estate market, NSAR data revealed that residential property sales in Halifax increased by almost nine percent year-over-year, amounting to 427 units. The average residential property price rose by close to three percent, slightly surpassing $531,000.
Therefore, Halifax housing prices have not experienced a decline.
Nonetheless, conditions have displayed a downward trend for much of the year, with residential property sales in Halifax dropping by 16 percent, totaling 4,260 transactions. The average sales price for a home in Halifax increased by two percent to $559,583.
Across the province, there has been an improvement in supply, with new and active residential listings soaring by 20.4 percent and 14.1 percent, respectively. New inventory might enter the Halifax real estate market as housing starts increased by 760 percent from October 2022 to 653 units, according to recent data from the Canada Mortgage and Housing Corporation (CMHC). Over the initial ten months, there have been 3,470 housing starts, marking a seven percent increase from a year ago.
Prospects for 2024
Forecasts for the Atlantic Canada real estate market in the upcoming year suggest mixed conditions along the nation’s seaboard.
TD Economics predicts smaller sales and price drops in New Brunswick and Nova Scotia but anticipates rising prices in Newfoundland and Labrador. The bank’s economist highlighted New Brunswick’s excellent housing affordability.
“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,” mentioned TD economist Rishi Sondhi in an October research note.
Contrarily, mortgage and economic reports differ in their predictions. Mortgage Professionals Canada (MPC) and Oxford Economics forecast a seven percent and ten percent house price drop for 2024 and 2025, respectively.
The Bank of Canada’s (BoC) expected rate cuts in response to cooling inflation and a slower Canadian economy could influence the Halifax real estate market. The impact of monetary policy changes on the housing market is yet to be fully realized, as these adjustments take time to permeate through the economy. Whether this will support or impede the Halifax real estate market is still uncertain.
