Activity remains robust despite the recent cooldown
The real estate market may be in something of a lull across the country at present – but in New Brunswick, strong affordability is spurring plenty of homebuying interest from both inside and outside the province, according to a broker based there.
Sarah Albert (pictured), a Moncton-based broker with Premiere Mortgage Centre, told Canadian Mortgage Professional that while activity had unsurprisingly cooled since the housing market boom of the COVID-19 pandemic, there were still several factors keeping business ticking over in the region.
“I’m feeling like it’s a little bit less competitive right now where clients have opportunities to make an offer and do due diligence for financing, for inspections,” she said. “So the heat’s off a little – but the prices are holding, the activity’s holding, our inventory isn’t really increasing.
“What I’m seeing from my perspective is that New Brunswick is still a place people want to be… the absolute bottom line is it’s affordable.”
Along with other markets, New Brunswick benefited from the pandemic trend that saw Canadians in pricier locations turn their attention to a move eastward and larger but more affordable properties.
That out-of-province interest is continuing, Albert said, especially among buyers who were initially swayed toward Nova Scotia but found it difficult to purchase a property there amid strong competition and supply shortages in the Halifax Regional Municipality (HRM).
“There’s just so much activity in Atlantic Canada with people coming here – and especially in Moncton and a lot of New Brunswick,” she said. “In Moncton, we have everything a big city has, we’re bilingual [and] our housing is still affordable.
“The reality is that it’s thriving because of the diversity with language, the newcomers that are coming. We have tons of talent coming from the big cities. So I think Moncton’s quite poised to continue to grow and thrive.”
New Brunswick market seeing robust 2023 performance
At latest reading, New Brunswick’s real estate market was posting a resilient performance, with the number of homes sold in August rising by 5.5% compared with the same time the previous year.
Home prices saw modest growth on a yearly basis, with the benchmark price of a single-family home inching upwards by 2.7% to $294,800 in that month, while townhouse and row units saw a year-over-year drop of 3.9% to $251,000 compared with August 2022.
As with elsewhere, however, new entrants to the market in New Brunswick continue to face steep affordability challenges, particularly with that home price appreciation and the fact that interest rates have surged over the past 18 months.
“First-time buyers here are feeling some of that hard pain. An average first-time buyer is buying a house for $250,000 to $300,000,” Albert explained. “Five years ago, that was $175,000 to $200,000. So it’s pretty competitive when we’re dealing in first-time buyers right now.
“It’s most challenging for the folks that are first-time buyers with a single income. With rates being so high, prices increasing, I find that single people, single parents, those are the markets that are being squeezed the tightest.”
The New Brunswick market is also bearing the signs of that prolonged national slowdown since last year, with home sales in August down 4.3% compared with the five-year average (although they remained 6.9% above the 10-year average for that month).
Latest Bank of Canada decision sees homeowners breathe a sigh of relief
There was at least modest good news on the interest rate front last week with the Bank of Canada’s decision to leave its benchmark rate unchanged for a second consecutive announcement, a move that Albert said was a welcome one for homeowners.
Bank of Canada's concerns over core inflation may keep rate hikes on the table, but a prolonged rate hold is the likeliest course of action, says BMO's chief economist Doug Porter.
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 30, 2023
Read more: https://t.co/9d0pYIMkFg#MortgageIndustry #RateHike #InterestRates #EconomicOutlook
“I feel like Canadians are kind of at their limit,” she said. “We’re seeing the pressure here for our clients that are hitting trigger rates, our clients with variable-rate mortgages where their payments have been going up.
“I think that that pain is everywhere. It’s exacerbated in our bigger provinces because the prices are so high, but it’s happening every. It’s not unique to one specific province.”
Looking ahead to 2024, Albert forecast a continually strong market for New Brunswick, particularly with the prospect of rates beginning to tick downwards at some point towards the end of that year.
Indeed, the surge of interest in the province’s housing market that transpired during the pandemic shows little sign of slowing.
“New Brunswick’s finally on the map,” Albert said. “It’s a pretty special place to be and people know it now. I don’t think we could put the lid back on that anymore – I think the genie’s out of the bottle.”
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