Mortgage 101 – Atlantic Advantage: Why Our Market Stays Strong

Dan Ahlstrand and Clinton Wilkins discuss the current state of the housing market in the fall. Clinton notes that while the market is still busy, it’s more balanced than in previous years.

Dan Ahlstrand
Hello there and welcome to the fall edition of Mortgage 101. I’m not Todd Veinotte, I’m Dan Ahlstrand, filling in for Todd. And of course, it wouldn’t be Mortgage 101 without our good friend and pal, Clinton Wilkins. It’s a good hour, and it’s informative, and we kind of have a little fun too.

Clinton Wilkins
It’s good to sometimes get out of the studio, and, I mean, you’re on the air from time to time, and obviously working in the news business, every day it’s nice to have a change of scenery sometimes, I’m sure.

Dan Ahlstrand
So tell me what fall is for Clinton Wilkins, what is fall like for you? I know it’s my favourite season of the year, but I would imagine that in the business that you’re in, fall is a time when people start to think, okay, maybe it’s time to sell before winter. Maybe it’s time to buy before winter. Is it busy?

Bank of Canada Rate Projections

Clinton Wilkins
It’s not just sweater weather, as many people may think it is a and it’s still summer. Technically, fall doesn’t happen until next week, right? But it is unseasonably busy right now. I think July and August may not have been as busy as we had anticipated, because we had a really nice summer. It was darn hot here in Halifax and across Nova Scotia, across Atlantic, Canada. There’s obviously some follow-up from some fires and things like that. I think there was some pent-up demand from July and August, and I’ll give a little teaser. I think we’ll talk a little bit more about the Bank of Canada during the show, but we had an economist. We had a call this week with economists from the Bank of Montreal, and they’re projecting that we’re going to see 75 basis points in the rate between now and January.

Dan Ahlstrand
So not in the next setting, but over the next couple.

Clinton Wilkins
Yeah, and I’ll go out on a limb, Dan, because I’ll be with you, I think, next Wednesday and I’m projecting that the bank is going to do a cut this time. I think they’re going to cut 25 basis points. I’ll put my neck out on the line.

Dan Ahlstrand
So there you go. I think we talked about this a year ago, and we were thinking that we were getting to the end of this right, and then, now we’re back. And then all of the stuff happened. If we got into tariffs, and we got into the economy, and we got into job losses, and now it looks like there’s going to be more, obviously, good news for those looking to buy.

Clinton Wilkins
Definitely good news for those who are looking to buy. But here’s the catalyst: Lower rates typically mean more demand, right? So more demand is going to drive those prices up potentially. So I think there’s a bit of a balance here. And I always tell people, I’m like, you can date the rate. The rates are probably going to change, but you’re going to buy the home when you buy a piece of real estate. So you need to balance out the cost of borrowing with the cost of real estate.

Dan Ahlstrand
Give me a little bit about demand. And the reason I asked that Clinton is, I mean, I drive home like everybody else does that’s listening to the show and and the route that I take is pretty consistent, and I’m seeing more for sale signs than I have over the last three or four years. So, so where are we at in the market? Are we still in a heavy seller’s market, or is that starting to change? And what do you think will happen with this rate change?

Market Balance and Demand

Clinton Wilkins
I do not think we are in a seller’s market. So maybe this is a little bit of news. I think the market is definitely more balanced. We’re getting more listings, and these listings are sitting on the market longer. Specifically, the price points are above 600,000. 600,000 and lower. They’re moving pretty quickly. But I can tell you, on the peninsula, there are lots of areas around Halifax, these listings are more than 600k, let me tell you, those are definitely sitting longer and the market is becoming more balanced. Personally, I’m here for it. It was wild and wonderful. In 2020, 2021, 2022, 2023, and 2024, I did very well. It’s tough for people, though it’s tough for first-time home buyers. It’s tough for buyers, and it’s tough for sellers when the demand is that high. So I think having a balanced market certainly is beneficial for a lot of people who are trying to do transactions. In Toronto, condos are 25% off. That is extreme. Homes in Vancouver, 6,7,8 percent off. In Nova Scotia, we’re seeing growth still, maybe even like a 3% growth. We’re always in a recession. We’re faring pretty well compared to the rest of the country, Dan. We’ve never had the boom, but we also haven’t had the bust, right? And I’m okay with that.

Dan Ahlstrand
So, is it a case of Atlantic Canada, particularly here in Nova Scotia, are we lagging behind the decrease in price in Western Canada and in Ontario? or is it just we’re in our own kind of, our own kind of atmosphere here, and this is the way it’s going to be here, particularly in HRM and in Nova Scotia?

Clinton Wilkins
We have more demand here than we have supply, right? So that’s really simple economics, and part of that was new to Canada, that’s people migrating from other areas of Canada, and we’ve had a very stable job market here. The one thing that is impacting us, from a terrorist perspective or tariff perspective, I should say, is tires. Because obviously, we’re manufacturing a lot of tires in Canada. And seafood, we are exporting a lot of seafood to the US and around the world. So there are some industries that are being impacted by this uncertainty with trade. But overall, we have a very stable market here, and that has treated the people who are employed in Nova Scotia very well. New Brunswick is doing pretty good, maybe not so much on lumber and some of these other exports that are going to the US. But overall, we’ve fared very, very well. Ontario, not so good. A lot of these big corporations are in Ontario, so when there are cuts, they are feeling it, and they have the auto and the auto industry, right?

Dan Ahlstrand
That’s a big one, Clinton. Some of those homes that I’ve seen on my route, I’ve seen sold a couple of times now, been here a while and some of those homes sold during that boom time, when we were seeing prices that were the high of the highest, they were way above what the asking price was. And then it was people were buying houses that were sight unseen. And that kind of thing is the reality sinking in that maybe the purchases that were made during that time were a little inflated. People are getting to that reality a year, two years in that I’m a little house poor here. Maybe it might be a good idea to sell this now and then look for something that’s in a more affordable, affordable price bracket.

Challenges for First-Time Home Buyers

Clinton Wilkins
This renewal cliff, I don’t think, has happened here, right? We’ve not seen a huge number of new listings. We’ve seen more and they’re staying on the market longer, which is helping to rebalance. But we still have a lot of demand here. I think some of the people that are selling, there’s probably some of this, Dan, but these are the outliers. People who are coming up for renewal are coming out of Mortgages at, like, 369, 389, 249, and they’re going into some rates at sub 4% or low fours or mid fours; they’re not having extreme increases in their cost of borrowing. Yes, maybe their cost of borrowing is double, but that doesn’t necessarily mean that their Mortgage payments double, because a Mortgage payment is made up of interest and principal. Yes, maybe their cost of borrowing is more, but I think more so these people who are selling because they need to. It’s not just the cost of interest. It’s what’s going on at the grocery store, it’s what’s going on at the pumps. It’s what’s going on at the day-to-day operation of their lives; the cost of everything has increased, and some people cannot sustain the increases, especially when we’re hearing that the job market is not so good. Remember, it was only a couple of years ago that we had this big trend of quiet quitting. People were leaving employers. They could just go get another job. That’s not so much the case today, and people are sticking around more with their employers, and some employers are just not able to keep this surplus of talent and labour that they’ve had.

Dan Ahlstrand
Clinton, when hosting the Todd Veinotte show, I’ve had a few people call up who are new or want to enter the housing market, but are finding it difficult to meet some of the rules that are laid out with regard to down payments. They’re unable to save enough money to get that down payment for that house in HRM. Is that going to change in the near future?

Clinton Wilkins
I don’t know if it’s going to get easier for first-time homebuyers. That’s my spoiler. The average rent here in HRM for a two-bedroom is something around $2,500. We were just talking to our producer before we started our show here, $2,000 a month for a bachelor or a one-bedroom apartment. That’s a lot of cash, no matter who you are and how much money you’re making. The average price point in Halifax is still about that $600,000 mark. You need a household income in excess of $100,000, $125,0000 $ or $150,000 a year to be able to justify buying a home at that price point; the incomes have not paced as fast as the cost of real estate. And I think some of these first-time home buyers that are getting into the real estate market, they’re getting in because they’re getting large family gifts to the tune of six figures. I’m seeing people coming in with, like, $100,000 gifts. Wow, really, bank of mother and father.

Future Outlook

Dan Ahlstrand
It’s the only way you can do it because if you go to a bank and you say, I want to get a $600,000 mortgage and you make this amount of money, and this is, I have only $15,000 or $20,000 in the bank, that’s not enough.

Clinton Wilkins
It’s not enough anymore. And, things will re-normalize. But these parents who are giving gifts, obviously, we’re talking about back to school. The number of times parents are looking to get their kids out of the house. They’re making it work. Don’t blame them. These parents have benefited from the increase in the cost of real estate. And these parents are thinking, Hey, if I don’t help my kids get into the housing market, they may never get into the housing market. They benefited from their real estate doubling, really, in the last five-plus years. And they’re saying, Hey kid, here’s a little early inheritance. We want to see you. Enjoy it while we’re still here.

Dan Ahlstrand
We’re off to a fantastic start. This is Mortgage 101, the September edition. He’s Clinton Wilkins. I’m Dan Ahlstrand. We’re back right after the break.