How much does it cost to buy a home right now?

Updated: June 1, 2022

Housing prices are seeing a shift across much of Canada. Even though we’re seeing a slight slowdown in real estate activity, there’s no denying homeownership is still pricey. But just how expensive is it to buy a home in Nova Scotia, and specifically in Halifax, right now? Here, we review some key data surrounding housing prices in the province, as well as other typical fees buyers will face in Nova Scotia.

Average housing prices

How have housing prices changed in the province? In June 2020, buyers could expect to spend around $287,777 on a home in Nova Scotia. In the Halifax-Dartmouth area, that number sat a bit higher at $366,668, as this is generally the priciest region of the province. These figures were still well below the Canadian national average price of $538,182, since Nova Scotia is known for its relative affordability.

Fast forward to April 2022. According to the Canadian Real Estate Association (CREA), the average housing price in Nova Scotia was $414,000, a 37 per cent increase from April 2021. In the Halifax-Dartmouth region specifically, the average housing price sat at $528,100 as of April 2022. This is also a rise from the same timeframe of the previous year (+37.9 per cent), where the average price was $382,900. These numbers are all lower than the current average Canadian housing price of $746,146, but they are an increase from previous years nonetheless.

If you’re interested in comparing other parts of the country, you can do so with the CREA national housing map.

We know housing prices have seen significant gains, but what about actual sales? Nova Scotia had 1,857 active listings as of the end of March 2022, according to the Nova Scotia Association of Realtors (NSAR). This was a 27.8 per cent decrease from the same period last year, indicating supply is still low. 1350 units sold as of April 2022, according to the CREA. A decrease in supply has led to fewer sales. However, despite low supply and high interest rates cooling off sales a bit, in general the market is still fairly competitive.

Down payment 

No matter how much your home costs, a down payment is a critical part of the home buying process. This is a percentage of the total cost you pay upfront before you can take ownership of your new home. Your down payment must be at least five per cent for the first $500,000 of the purchase price, and then 10 per cent for the rest of the purchase price above that $500,000 mark. However, people are often encouraged to save up a 20 per cent down payment to avoid mortgage default insurance (more on that below). 

Let’s use the April 2022 Halifax-Dartmouth average of $528,100 as an example. A five per cent down payment on the first $500,000 would be $25,000, and 10 per cent of the remaining $28,100 is $2,810, for a minimum down payment of $27,810. A 20 per cent down payment for the same purchase price is $105,620. This is the biggest lump sum you will need to save up, and these numbers give you an idea of how much it will cost to buy a home here. It’s important to start saving early for your down payment, because even a five per cent payment can be substantial. 

CMHC insurance

Mortgage default insurance comes into effect when your down payment is less than 20 per cent. Buyers with a smaller down payment, and therefore a bigger mortgage, are considered higher risk to lenders. This insurance is designed to protect them in case of a default, while still allowing you to buy a home. This insurance is usually rolled into your mortgage as a premium you pay alongside your regular monthly payments. Canada Mortgage and Housing Corporation (CMHC) is the biggest provider of this insurance, which is why it’s commonly called CMHC insurance.

Your lender will calculate the cost of CMHC insurance by dividing your mortgage loan amount by your home’s purchase price. We can use the 2022 Halifax-Dartmouth pricing average again as an example. Based on your $27,810 down payment, this comes with a premium of around $20,012.

Home inspection

Home inspections are another fee you will face when buying a home. They cost you money upfront, but can save you thousands down the road. Due to the crazy market we’ve experienced, there have been many cases of people buying homes without inspections. It might be tempting, but you should never do this! A home inspection will make you aware of any issues with the home, such as rot, foundation problems, water damage, etc. This gives you a chance to walk away before you commit to spending thousands of extra dollars. If you buy a home without knowing about these issues, you will have to pay big time to fix them. In Nova Scotia, a home inspection hovers around $500, but prices can vary. Either way, it’s worth every penny.

Land transfer tax 

Land transfer tax is based on your home’s purchase price, and is one of several closing costs you face when buying a home. In Nova Scotia, this tax varies from municipality to municipality. In Halifax, for example, the rate is 1.5 per cent of the selling price of a home. On a $528,100 home, this would be another $7,921.5 buyers will have to pay. It’s important to be mindful of these extra costs as they will add up to a significant amount. You can read more about common closing costs you should prepare for here. 

Legal fees

Of course, you also need a lawyer on your side when you buy a home! Lawyers are a big part of this process. They review documents, verify property taxes, draft title deeds, calculate land transfer tax, etc. Basically, you can’t buy a home without a lawyer. As helpful as a lawyer is, they will also cost you a good chunk of money when all is said and done. In Nova Scotia, typical lawyer costs can be $1,000 and over, and these fees are paid on closing.

Buying a home is a thrilling experience, but it’s important to be prepared for the costs! You should also get the help of a mortgage broker to make your experience as smooth as possible — learn more about how we do that here. If you’re interested in buying a home, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.