Your 2023 Halifax market outlook

Now that 2023 is underway, you may be wondering how the Halifax market is going to develop this year. Between interest rates, housing prices, and supply and demand, we’re likely to have an interesting year in the market. Below, we discuss how the trends are likely to unfold in our region in 2023. Of course, nothing is set in stone, but here’s what the general expectations are!

Interest rates

As you know, the Bank of Canada ended 2022 with another interest rate hike, putting the overnight rate at 4.25 per cent. The bank did note during their announcement, however, that the need for further rate increases was still up in the air. This gave the impression the bank is slowing down or ending this rate hike cycle, as inflation is subsiding. In 2023, if we see rate increases, they will likely be short-lived. The next Bank of Canada announcement is January 25th, where we will see how the bank sets the tone for interest rates this year. In general, prepare to see a less aggressive year from the central bank in terms of rate hikes, and we can probably expect to see rates decline later in the year.

Supply and demand

We ended 2022 with lower housing demand in the Halifax market than in the first half of the year. Due to the rate hikes described above, the cost of borrowing became more expensive and fewer buyers were rushing into the market. After all, it was the draw of historically low rates that caused such a frenzy to buy throughout the pandemic. As demand settled, we saw a bit more housing supply on the market. However, overall we still experienced a seller’s market, which is likely to continue in 2023. According to RE/MAX, move-up buyers, or buyers looking to move to a bigger home, will lead demand in Halifax, and single detached homes will be in highest demand. We should expect a fairly active year in the Halifax market, so supply may dip as demand increases.

Housing prices

Everyone involved in the market, whether buyer, seller, or home owner, wants to know how much homes will cost. RE/MAX estimates the average Halifax housing price in 2023 to be $586,076,04. This is an increase from 2022’s average price of $542,663, supporting the idea that demand will be high enough to keep driving prices up. This puts sellers in a fairly good position, but buyers can definitely still have a successful housing hunt this year. Buyers will just need to be strategic about when they enter the market!

When should you enter the market?

As a buyer in 2023, you will be juggling higher interest rates, higher housing prices, and the risk of a recession late in the year. Timing is important if you’re hoping to buy. As the year progresses, we are likely to see interest rates decrease, as the Bank of Canada will have exhausted its rate hike cycle. This means borrowing will be a bit cheaper later in the year. 

However, when interest rates go down, housing prices might increase further, as demand will likely increase. This means buying in the first half of the year will probably involve less competition and lower housing prices. On top of all of that, you need to be aware of how a potential recession might affect the market and your own purchasing power. You can get in touch with a mortgage professional to discuss your options and when you might do best in the market. Mortgage brokers can help you determine how your circumstances align with the current market trends!

What can current home owners do?

If you’re already a home owner, what are your options? Of course, you don’t have to make any changes to your mortgage if they reflect your needs well, but it’s a good time to consider whether your needs have changed. For example, are you worried about making monthly mortgage payments, especially if rates increase? It might be beneficial to lengthen your amortization period, meaning you will have a lower monthly payment stretched out over a longer period of time. If you are experiencing bigger debt issues, you can consider debt consolidation. Finally, you can refinance to access home equity if you need cash for any big expenses, like home renovations or paying for a child’s post-secondary education. The bottom line is there are lots of ways for home owners to use their houses to their advantage in the Halifax market this year.

The Halifax market is likely to be fairly active in 2023, but we might have a better picture of how it will develop once the Bank of Canada sets the tone for interest rates. In any case, it’s important to be aware of your options in the market as a buyer, seller, or home owner. The market can certainly be confusing, which is why it’s also great to use a broker for all your mortgage needs! We can help you ensure you start 2023 off right.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.