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Potential homebuyers in Halifax are banking on the possibility of reduced interest rates before making the jump, says a report released Tuesday by RE/MAX Canada.
The company’s 2024 Tax Report looked at the residential real estate markets in Halifax, Vancouver, Calgary, Winnipeg, Toronto and Montreal.
The conclusion about buyers waiting out interest rates is a bit speculative, admitted Ryan Hartlen of RE/MAX Nova, but is based on conversations between agents and clients.
“We’ve certainly got a bit of pent-up demand that came out of the pandemic and a lack of inventory the last few years,” Hartlen said in an interview. “That has been suppressed a little bit by the economic factors, increased interest rates, that sort of thing. We’ve seen a slightly more balanced market, but the reality is that with the migration and immigration along with the existing pool of homebuyers here, we know there’s demand still in the marketplace, more demand than listings.”
Hartlen said it’s become harder to afford properties in Nova Scotia, given the price increases over the last few years, along with the most recent interest rate challenges.
The average home purchase price in Halifax in 2023 was $552,700, up from $536,700 the year before.
The hope is that Bank of Canada decisions on rates this year will spur activity, though demand has stayed healthy in metro at certain price points. However, homes built more recently tend to be more expensive, and price appreciation of existing housing has put more homes in that category.
“Think of it almost as a price segment – segments in that $700,000 and up range tend to move a little slower, and we have more inventory there than we’ve ever had before,” said Hartlen, adding that homes priced at $500,000 and below are faster sellers, but harder to find. “If you can find a property for less than $500,000 here, you’re going to have some pretty decent activity on it.”
Halifax’s unusual position as a destination both for Canadians moving from higher-priced cities and as a home for new immigrants also factors into the real estate equation.
“In 2023, more than 5,300 interprovincial migrants and over 20,000 immigrants moved to Nova Scotia in the first three-quarters of the year,” the Re/MAX report said, quoting from Statistics Canada figures.
Apart from Alberta, the Maritime provinces have been most attractive to people from the most expensive provinces to live in, like Ontario and B.C., looking to cash in on the equity in their homes. All other provinces saw more people leaving than arriving.
Haligonians, said Hartlen, are struggling to come to grips with how quickly prices have risen, whereas people coming from other areas have a different perspective.
The resulting increase in population “came as a surprise, driving upward momentum in housing values, as buyers from other provinces and countries arrive flush with cash, outspending the average Halifax buyer in large part due to stronger buying power. Inventory levels have improved significantly over one year ago, but less than 1,000 homes are currently listed for sale,” said the report.
Hartlen said the rural areas just slightly outside the city will become more popular over the next few years, especially those close to Highways 102 and 103, as will smaller communities benefiting from the fact some people no longer have to commute and can work from home.
“They’re saying ‘I want to move back to Antigonish, I want to move to Truro,’ they don’t need to be in Halifax anymore. That’s a bit of a trend as well,” he said, also noting the purchase by developers of large tracts of land in the Elmsdale and Enfield areas.
The deed transfer tax of 1.5 per cent on the purchase of a home in Halifax continues to be an irritant, said Hartlen, though it pales next to the tax of five per cent charged to homebuyers from outside Nova Scotia.
“Certainly, when it was rolled out it was met with a lot of frustration,” he said. “The original format was pretty punitive … since then, it’s been changed but when you have people who are on the fence about moving from Toronto to somewhere else and they’re looking at Atlantic Canada in general, that five per cent can make a difference and force them to look at another province or not make the move at all.”