What To Expect In 2014 Province By Province: Nova Scotia

Smaller than all provinces but PEI, yet retaining one of the most densely populated landmasses in all of Canada, Nova Scotia was home to one of the first permanent settlements from European explorers in the 1600s.  The urban population is spread out across three major regional municipalities, while over half of Nova Scotians live in rural regions of the province. 

The province is rich in natural resources, and is one of the tourism capitals of Canada – with thousands of cruise ships flowing in and out of the Port of Halifax each year.  Nova Scotia is also home to the Bluenose and its descendent, Bluenose II – the famous ships on the back of the Canadian dime.

Annual incomes in Nova Scotia are in line with national averages of around $47,000, while many homeowners in Halifax earn substantially more.  With salaries holding in line to the national average, potential homebuyers had plenty of options throughout 2013, as well as sellers willing to wait for the proper buyer – conditions that are forecast to continue in 2014.

Variable or Fixed Mortgage

Nova Scotia is arguably the strongest of all the Atlantic Provinces economically speaking, with investments in resource development translating into good paying, fulltime jobs for residents.  As a result, many people are considering reentering the housing market after remaining on the sidelines in the fallout of the global recession.

Though the economy is growing, many Nova Scotians prefer security and stability when it comes to home financing.  Fixed year mortgage rates are very popular as homeowners are guaranteed to pay the same amount each month.  But variable mortgages are also popular with today’s low borrowing cost environment, which is forecast to remain low into 2015.

However, the statistics for the majority of Nova Scotians may not necessarily reflect what is best for you as an individual homebuyer.  There are many affordable mortgage options in Nova Scotia that can help you find the best home for you and your family – in the interior, or along the coast.

2013

The economy was stagnant for the first half of 2013, before things changed later in the year as a result of private sector investments, particularly in southern communities around Yarmouth.  Unfortunately, the fourth quarter economic turnaround was too little too late to stop many Nova Scotians from migrating west, decreasing the value of housing.

The demand for single detached homes slowed considerably due to a prolonged high period of unemployment that at one point hovered close to 9 percent.  The CMHC found that single detached starts fell in 2013 compared to the year prior, while demand for multiunit homes was primarily fuelled by renters – mainly living around Halifax, Dartmouth, and surrounding regions.

Due to the fluctuating demand, both sales and average home prices across Nova Scotia declined in 2013 year over year.  MLS listings were higher, but struggled to change hands due to reduced demand.  As a result, the market, particularly in the summer, was one made for buyers, lowering average list prices to around $218,000.

Home Price Predictions 2014

While the economy is not booming, CMHC economists predict a shift towards positive growth in 2014.  A lower Canadian dollar will increase demand for Nova Scotia’s natural resources, particularly as the US economy rebounds as expected throughout the year.  The province will also benefit when the Yarmouth-Maine ferry service resumes in May.

As the economy improves and more jobs are made available, demand for housing will also increase.  With greater demand, the CMHC predicts single detached housing starts will improve throughout the year.  However, the total number of multiunit starts is expected to remain relatively flat year over year.

While sales declined from 2012 into 2013, realtors expect a reversal in 2014.  MLS sales are expected to approach 10,000 new transactions by the end of the year as fewer Nova Scotians leave the province.  Improved sales along with higher demand will help prices around 1 percent to $220,000.

Halifax

The Greater Halifax metropolitan area, including the region of Dartmouth, will lead Atlantic Canada in real estate performance throughout 2014, according to real estate organization RE/MAX.

As the provincial economy began rebounding in the latter half of 2013, residents in Halifax delved back into the real estate market, particularly for low to mid priced homes.  First time buyers are reportedly interested in detached to semi detached homes, and this increased demand is expected to raise average prices to around $278,000.

Sales are forecast to rise approximately 5 percent in and around Halifax, one of the largest annual gains in any Eastern Canadian city.  If homeownership is on your bucket list for 2014 in Nova Scotia, the provincial capital may be the place to make that commitment.

Amherst

Located near the border with New Brunswick along an arm of the Bay of Fundy, Amherst is a quaint town of approximately 9,700 people.  The community has been a popular destination for affordable housing in the past, but spent much of 2013 struggling with poor maintenance of existing properties along with prices rising beyond affordability for many low income families.

However, demand for housing in Amherst benefits due to the shared border with New Brunswick.  Amherst is located approximately 65 km from the Greater Moncton Area, one of the stronger markets in the Maritimes.  As a result, many people are willing to commute to the bigger city from homes in smaller communities.

Current homes for sale in Amherst are listed with prices averaging around $165,000, though some sellers are valuing their homes at higher rates.  Be sure to consult all options before buying if you believe Amherst is an ideal location to become a homeowner – you may find a better deal by comparing options first.

Yarmouth

Southern Nova Scotia, particularly Yarmouth, will benefit from the reestablished Yarmouth-Maine ferry, which will yield significant shipbuilding investments in the community.  This inflow of economic stimulus will provide local residents improved job prospects, and incentive to invest in homes in the second half of 2014, as well as carrying over into 2015.

Average home prices around Yarmouth fell to the lowest levels in Nova Scotia by mid 2013, at one point averaging less than $100,000.  Sales activity reached a near 10 year low, down approximately 10 percent from average sales in the mid 2000s.

Prices have since improved, with the gap in sales narrowing as economic growth appears to be on the horizon.  Sellers are holding firm on their listing prices to begin the year, leaving little room for prospective buyers to negotiate lower prices.

Closing Thoughts

While 2013 was a difficult year for housing in Nova Scotia, 2014 is expected to be a rebound for the market across most areas of the province.  Areas as far north as Cape Breton Island, particularly surrounding the city of Sydney will also benefit from greater economic investments in the province.

Home prices in the south fell to near record lows last year, but don’t expect prices to remain that strong of a bargain in 2014.  Fewer people are migrating west than in years past, which will increase the demand for homes, and provide sellers leverage to hold firm on their asking prices.

If you live in Nova Scotia and want to invest in a home, be sure to look at all possibilities before committing to one specific property.  This includes shopping around and comparing the most affordable mortgage rates that you can negotiate.  Once you know your target rate, you can then decide how much you are willing to pay for a home, including the amount you can put down on a down payment.

Nova Scotia will be the strongest market for housing in the Maritimes this year.  Buying a home may come down to a matter of timing.