From, Realtor Terry Black
Without doubt the price of property has reached historic highs. Plus, the average Canadian is under tremendous pressure from a variety of local and global sources. Russia’s war against the Ukraine coincided with a tenfold increase in the Central Bank of Canada’s lending rate to chartered banks (.25% March 1/22 to current 2.50% since July 13/22). N.S. has a Consumer Price Index increase of 7.1% in April (latest date recorded by NS Dept of Finance) with 7.8% increase in shelter costs and a whopping 31.2% increase in shelter costs. Everything costs more! This is not fun. With less money to go around will housing prices fall?
Interesting that the only price category to show a reduction is the price range of $200,000- $400,000…. $3,500 on average or a 1% drop. Hardly noticeable given the 40% plus price gains Seller’s have seen for the past few years. More noticeable is that the number of housing units sold was 39.7% lower in June-July that April-May. That is no doubt concerning to Seller’s. Could this present future opportunity for Buyer’s longing to be owners. Could this represent Buyer’s longed for big break?
Consider this: 205 homes came off the market (did not sell during contract) in April/May vs 96 came off the market during June/July. Thus 47% fewer homes did not sell. Also, there are only 781 homes on the market today in all price categories. Given that Realtors sold 957 over the past 2 months current inventory represents only a 6-week supply.
We are in historic tough times price wise, but we have also experienced some of the best times in recent years in terms of the power of money. The interest rate was artificially reduced 1.25% April 2020 because of Covid response. Covid is with us still, but inflation became our new enemy. It was a perfect storm scenario for inflation unfortunately after Covid and here we are.
Prediction: prices hold or rise slightly for housing that’s in decent to excellent condition. Homes requiring major renovations for updating (taste) or age obsolescence will slightly decrease. Buyers worry about high renovation labour and material costs but not as much as sleeping in their car. There will not be a market crash. Net immigration, good paying jobs, low cost of housing compared to other provinces, desirability of Nova Scotia as a place to live and failed government rent control policy (small landlords are selling in droves to Buyer owners who will live in the former rental home causing homeless tenants to sleep in cars & tents) will continue to put pressure on this market. The fact is that not enough homes are for sale and the replacement homes and apartments cannot be built fast enough. It’s supply and demand 101. We require far more housing options than will be available for the next 3-5 years minimum.