Halifax’s Housing Market Is Finally Starting To Cool

HALIFAX—New data from the Nova Scotia Association of Realtors shows Halifax’s housing market is finally starting to cool off.

Home sales in the city, and across the province, are down and, while prices are still significantly higher than they were last year, they are falling slightly in the short term.

In Halifax, 760 homes sold were sold in June. That’s a 5.4 percent decrease compared to June of 2021. Across the entire province, 1,476 homes were sold, a drop of 7.3 percent compared to the same time last year.

On a year-to-date basis, home sales across Nova Scotia totaled 6,933 units over the first six months of the year. This was a large decline of 18.1 percent compared to the same period in 2021.

As home sales shrunk slightly last month, the number of new listings rose. In June 2022, 2,271 new residential listings hit the Nova Scotia Market. That’s a jump of 4.3 percent compared to June 2021.

As listings rise and sales fall, means more homes are available for sale. The NSAR says there were 2.3 months of inventory in the province in June 2022, up from the 2.1 months recorded at the end of June 2021.

However, 2.3 is still historically quite low. The long-run average for the province is 6.9 months.

Despite homes sales shrinking slightly, the NSAR says “the pressure from buyer demand means we continued to see prices rise across Nova Scotia in June 2022.”

In Halifax, the average home sold for $567,671 in June, which was a 22 percent increase compared to June of 2021. Nova Scotia-wide, the average sale price was $452,748, a jump of almost 26 percent compared to June 2021.

But, while home prices are up compared tolast year, crucially, they are down slightly on a month-over-month basis.

Slight, short-term price drops in Nova Scotia follow a Canada-wide trend of falling home prices. As BDC pointed out in its June 2022 economic letter, slowing sales and rising inventories this spring helped push down home prices across the country.

“If one thing was certain in the spring of 2022, the torrid pace of activity in the Canadian housing market was unsustainable. As Canadians slowly begin to acclimatize to a world where COVID is endemic and economic conditions more difficult, new market dynamics are emerging,” BDC says.

Market trends over the past few months have been helped along by runaway inflation and higher mortgage interest rates.

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“There is no doubt that with inflation and the accompanying rise in interest rates, the market has slowed down,” BDC said.

The bank said a “key factor” driving the market slowdown is inflation, which remains at 30-year highs and is not expected to abate anytime soon in Canada.  More expensive goods make consumers less confident and less open to making big purchases, like a house.

Meanwhile, Bank of Canada policy is leading to rising interest rates.

BDC says the last time the Canadian real estate market faced rates as high as they are now was “in 2010 when the market was still reeling from the effects of the financial crisis.”