N.S. home sales fell in 2023 with limited choice and stubbornly high prices, say industry experts
As Nova Scotia tries to build itself out of a housing shortage, local real estate agents say there still aren’t enough homes on the market and new construction is priced too high for most buyers.
Data from the Nova Scotia Association of Realtors said 10,333 units were sold in the province in 2023, down 17.2 per cent from 2022. In December alone, home sales were 25 per cent below the five-year average for that month.
The association also reported a modest price increase of 2.9 per cent on average prices of all housing categories combined. But demand was strong for the limited supply in the $200,000-$300,000 range. And single detached homes priced from $400,000-$500,000 sold faster than any other category in the last three months of 2023.
“So we see prices going up, but volume declining,” said Chris Melnyk, a Realtor with Royal Lepage Atlantic. “I don’t necessarily see this ending because they’re not going to create … new developments with new processes tomorrow, it’s likely going to take a while.”
Melnyk said new homes need to be priced lower because many sit on the market for months after they’re built.
Nova Scotia Association of Realtors data shows real estate prices were up over 2023, but sales were down. High interest rates are keeping some people priced out of the market, but a low inventory is driving demand and competition and keeping prices high, according to professionals in the industry.
“A lot of people just say ‘We need more homes, we need more homes, there’s a housing shortage’. But really there’s a word that needs to be snuck in there — affordable housing shortage.”
Melnyk makes YouTube videos often aimed at first-time home buyers and out-of-province buyers looking to learn about Nova Scotia.
He says with interest rates at five per cent, the amount of money banks will pre-approve for a mortgage is less than in past years when interest rates were lower.
This means the most popular price range is still below $500,000, but that price is becoming harder to find in Halifax. And because of high construction costs, many new builds are listed above $700,000 which is unattainable for many buyers.
“Those are more like discretionary spending,” he said. “It’s like you don’t need a $700,000 home, but you do need a place for your kids and your family to grow up in and that would be potentially like the $450[000]-$500,000 home.”
Sales of higher-priced homes slowing down
Donna Harding, co-owner and broker at Engel & Völkers in Nova Scotia, said luxury home sales are also down, though prices are up.
Engel & Völkers 2023 year-end report showed sales of homes over $1-million in Halifax were down 16 per cent, but the average cost was up 13 per cent.
“That’s an inventory story really, and unfortunately that’s the story that affects the whole country,” Harding said. “But for Nova Scotia and for Halifax, I think it’s going to affect us for a long time to come.”
Though Nova Scotia saw inter-provincial migration slow down in 2023, the province’s population still experienced its highest rate of growth in over 50 years.
Harding said average listing prices are unlikely to go down in 2024 because it takes time to beef up inventory by building homes.
Denise MacDonell of Red Door Realty in Halifax said inventory is also affected by people deciding not to sell because they “don’t have anywhere to go.”
“Folks of an age that would typically downsize don’t have a viable alternative, and rental accommodations, of the standard to which they have become accustomed, comes at a steep cost,” MacDonell said. “Keeping their houses seems like a better idea, and there is no built stock that makes sense right now.”
Changing the way we buy
Melnyk said he’s seeing people change the way they buy, with many people sharing mortgages or deciding to buy duplexes or homes with secondary suites they can rent out.
“I’ve had clients where a number of people will come together and you’ll have four people on a mortgage which is the maximum number of people you can have on a mortgage,” he said.
Gabriel LeVert and his wife fall in this camp. As they searched for their first home in Bedford, they decided to buy a property that could provide a rental income.
LeVert said he never planned to become a landlord, but renting out a basement apartment appeared to be the better option.
“It really helped alleviate the stress of a high mortgage,” LeVert said. “Because if one of us loses our job for whatever reason or we’re unable to work, we have another source of income. It just makes us live a little more comfortably.”
Changing the way we build
Harding said in order for prices to come down, the province needs to be creative.
“We need to come up with options, we need to build tiny houses, we need to increase the height inside the city core,” she said. “It’s going to mean big changes for Nova Scotia and especially for Halifax, but it’s 2024 and we’re in the middle of changes, not only provincially but globally and nationally, so we too have to adapt.”
In mid-January, the federal and Atlantic housing ministers agreed pre-fabricated homes are a good strategy to alleviate housing shortages.
