The real estate market in New Brunswick has started to show signs of cooling after two years of frequent record-setting.
Sales statistics released by the Canadian Real Estate Association for September showed significant sales declines in each of the three large markets.
In Saint John, home sales declined by 24.3 per cent compared to September of last year. For Greater Moncton and the Fredericton area, declines reached 34.5 per cent and 35.9 per cent, respectively.
“Our folks and friends in Ontario who were selling their homes and basically coming to Atlantic Canada, Saint John no different, have not sold their homes, and basically, if they’re not selling their homes in Ontario, they’re typically not coming to buy here,” said John McAloney, a long-time real estate agent in southeastern New Brunswick.
Significant population growth in the province over the recent months has been largely attributed to interprovincial immigration, as well as national immigration.
As a consequence, increased demand and limited supply pushed markets to hit new records in overall sales, the average price of homes sold, and other notable statistics.
“We were a very strong sellers market throughout COVID, and now we are etching towards a balanced market,” McAloney added.
Rising interest rates doled out by the Bank of Canada with the intention of cooling inflation have put real estate markets in a bind.
However, as sales decline, home prices have not seen substantial changes.
Mike Power is the president of Greater Moncton Realtors, where the overall benchmark price in September was $321,600 — down less than two per cent from last month.
“The prices are not taking the kind of beating that you would see in an Ontario or B.C., but our market has been underpriced for so long that it just didn’t have that place to go,” Power told Global News Wednesday afternoon.
Power said the consistently high levels of newcomers in the region have meant supply remains depleted, thus maintaining prices.
By September’s end, there were 1,108 units on the market in the Moncton region.
“We just don’t have four or five thousand houses sitting empty,” he noted.
“When you have this kind of demand, it will support the market for a while.”
Experts have warned more interest rate hikes will likely be announced in the coming months and into 2023. However, they aren’t expected to send home prices in the region spiralling.
“If it was going to be as dramatic as everywhere else, it would’ve already happened because it’s not like you’re getting interest rates six months later than everybody else,” Shaun Cathcart, senior economist for the Canadian Real Estate Association, told Global News.
Due to the province’s overall affordability and continued levels of immigration, interest rates have not had the same impact in New Brunswick, Cathcart said.
While many regions nationwide have seen prices drop, Cathcart said New Brunswick will continue to see activity flatten out.
“Sales expected to get stopped in their tracks, prices expected to get stopped in their tracks, and that’s, like I say relatively, a lot better given the rate hikes we’ve seen and virtually anywhere else in the country,” Cathcart remarked.
According to McAloney, the cooling market does appear to be beneficial for many local buyers who previously felt their dream of purchasing a home was out of reach.
“That dream is certainly still there,” McAloney said, adding “It’s nice to see that our local folks are having a chance to buy homes and basically shelter, which is what they need — it’s part of humanity.”
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