Your mid-year Halifax market update

As hard as it is to believe, we’re almost halfway through the year! 2022 has been a busy year for the real estate industry, from rising interest rates to shifts in markets across the country. So, it’s time for a Halifax market update to focus on trends in our own city. How are prices faring compared to the rest of the country? How are rate hikes impacting demand? What are your options as a buyer or seller? Here’s what to keep in mind as you navigate the Halifax market right now.

Interest rates are on the rise

It’s no secret now that the Bank of Canada is going to continuously increase interest rates until they feel the market and inflation have settled down. With another interest rate announcement approaching on July 13, we may see another rise to the overnight rate which now sits at 1.5 per cent. If rates continue to rise, and we believe they will, this means borrowing is going to become more expensive and people will be paying higher monthly interest rates on their mortgage. 

Since rates are rising from record lows thanks to the pandemic, it’s worth noting they are still relatively low. Will these aggressive rate hikes cause a recession? There have been talks that a recession is in the future, as intense rate hikes may cause a market crash. Whether we will see a crash or a mere “correction” is yet to be determined, but we want to encourage clients not to panic. Clients with mortgages are financially prepared for rate changes, and now is a good time to review your finances in the case of an economic downturn.

Prices are still rising

As of now, the prices of homes in Halifax and Nova Scotia are still on the rise, while markets in Ontario and much of Canada are experiencing downturns. According to the Canadian Real Estate Association (CREA), the average housing price in Nova Scotia was $414,000 in April 2022. This is a 37 per cent increase from April 2021. Halifax also experienced a 37.9 per cent increase in price, with the April 2022 numbers coming in at $528,100. While these numbers are lower than the Canadian average of $746,146, they are higher than east coasters are used to. Prices are still expected to increase this year, as people continue to move to Halifax for its relative affordability.

Supply and demand 

One thing we want to highlight for this Halifax market update is supply and demand. The Nova Scotia Association of Realtors (NSAR) notes that the province had 1,857 listings by the end of March 2022. This was a 27.8 per cent decline from March 2021, showing supply is still low. Low supply has resulted in a lower number of sales in Halifax and Nova Scotia. High interest rates are likely also playing a role in lowering sales figures, but we are still seeing a fairly competitive market, indicating that lack of supply is the biggest driver of these trends. As we see more rate increases, this may become a bigger factor in terms of people stepping back from the market. As demand drops, we may also see more supply coming through, but we will have to see how the summer plays out.

Hoping to buy?

If you want to buy a home this summer, you should still prepare for a challenging experience. Last year, buyers dealt with record-high prices and intense competition. This year, both of those things are still quite prominent, plus buyers have to contend with higher interest rates. This isn’t to scare you or to say it’s impossible to buy a home, but that you should be ready for the process. Be sure you have a down payment saved up, and that you have a mortgage pre-approval. It’s also good to review your debts and income to make sure you can pass the mortgage stress test. This test ensures that in the case of future rate increases, borrowers can still support a mortgage. As rates continue to rise, this test will become extremely important for buyers.

Looking to sell?

This Halifax market update brings some good news for sellers. For the most part, the market is still in your favour. Selling prices are still on the rise, and supply is still relatively low, meaning you can most likely sell your home for a good price. It’s worth noting that interest rates are likely to cool demand at some point, so if you’re planning on selling, it’s best not to delay. Selling this summer means you should have a positive experience in the market.

Can you refinance?

With all of these market changes, is it a good time for current home owners to refinance their mortgage, or should they stay put? There may be some benefit in refinancing depending on your situation. For instance, we don’t recommend refinancing to a fixed rate right now, because fixed rates are quite higher than variable rates today. However, if you have a variable rate and want to renegotiate your terms or shorten your amortization period, these could be good reasons to refinance. You can read more about refinancing your mortgage here. 

This Halifax market update serves to highlight the fact that housing prices are still rising, but interest rate hikes may begin to cool the market later this year. In the meantime, buying is likely to be a competitive endeavor. If you want to learn more about your options as either a buyer, seller, or home owner, you can contact a broker to chat about the routes you can take.

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.