The city became a popular option for out-of-province buyers during the pandemic
As Canada’s urban exodus gathered steam at the height of the COVID-19 pandemic, Atlantic provinces including Nova Scotia emerged as prime real estate locations, with a combination of affordability and scenic surroundings propelling high interest in buying a property in the East.
Unsurprisingly, the national housing market cooldown of recent months has also spread eastwards, although there’s plenty of evidence that Nova Scotia continues to move at a reasonably steady clip where home sales are concerned.
The province posted more moderate sales figures in May than the same time last year – with year-over-year sales declining by 7.3%, according to the Nova Scotia Association of Realtors – but its housing market still boomed above pre-pandemic levels, with 1,476 units sold keeping it 11.3% above the five-year average and a whopping 22.1% over the 10-year average.
House prices also continue to soar on a yearly basis. In Halifax-Dartmouth, the most populous region of the Halifax Regional Municipality (HRM), residential sales decreased by 5.4% year over year, but prices surged 22.2% in May compared with the same time last year to an average of $567,671.
While sales across the province on a year-to-date basis were down substantially over the same period in 2021, the average price had rocketed by 24.1%, bolstered by a 26.6% increase in Halifax-Dartmouth.
Purchase activity for starter or second homes appears to be remaining brisk, according to John Vo (pictured top), broker and partner at the Halifax-based Spicer Vo Mortgage Inc. On higher-end homes – those priced at around $750,000 or over – prices seem to be moderating as the market cools.
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“We’re starting to see the prices on those maybe levelling off a little bit more than, say, your starter homes or second homes like bungalows, semis and condos,” he told Canadian Mortgage Professional. “Those will be busy for a while because there’s more people in that market.
“With them, they’re typically not as stretched as, say, someone in a higher-end home. They might be more affected by increases in rates and qualifying rates. With starter homes, some people might exit the market, but there’s still going to be a core base.”
The slowdown is also presenting some opportunity for buyers who may have been interested in purchasing a lake property or oceanfront home but found themselves frozen out by ferocious bidding wars and huge price increases during the pandemic.
Those properties would commonly sell for between $200,000 and $300,000 over asking price at the height of the market frenzy, Vo said – and while they remain highly marketable and will continue to be priced at a premium, they could be moving away from their pandemic-era peaks.
April 01 saw Nova Scotia’s provincial government introduce a non-resident deed transfer tax of 5% on the greater between the purchase price or assessed property value, a move that’s likely to quell interest in the province from outside investors.
That said, plenty of buyers from outside Nova Scotia remain interested in purchasing a property and relocating from their current province, Vo said, in a trend that’s continued from the height of public health orders, travel restrictions and work-from-home guidelines during the pandemic.
Read more: Nova Scotia's finance minister defends two new taxes on non-resident property owners
“When we started seeing the pandemic happening, people were able to work remotely and from different parts of the country,” he said. “I’ve had it happen a few times where I did a mortgage for someone who was moving from Ontario, and then for their sister or their friend who also moved here.
“There was always that ripple effect, and we’re still seeing a lot of out-of-province buyers moving and staying here.”
While Halifax’s housing market might traditionally have been left behind by other red-hot Canadian cities, Vo said the area is “getting the credit it deserves,” with heightened interest during the pandemic having opened many buyers’ eyes to its vitality as a place to live.
That’s not just because property remains more affordable than in many other major Canadian cities, he said, but also because of Halifax’s proximity to oceans, lakes, a major airport, shopping centres and cultural hubs.
“I’m really happy to see the growth that’s happened over the last 10, 15, 20 years,” he said. “The HRM is really putting Atlantic Canada on the map, and it’s good to see this happening in the Atlantic.”
