New restrictions at the Nova Scotia border likely won’t have much of an impact on the increased number of people scooping up homes from outside of the province.
Last Tuesday, the province announced it would be closing the border to people from all provinces except Nova Scotia, P.E.I. and Newfoundland and Labrador, unless their travel is essential or they are permanent residents of Nova Scotia. A 14-day quarantine remains for people from New Brunswick.
Previously, people from any province could enter Nova Scotia if they self-isolated for 14 days upon arrival.
“This is not the time for people to come to Nova Scotia for anything other than essential travel,” Premier Iain Rankin said the day the restrictions were announced. “Given that the pandemic is now being driven by variants that transmit more easily, this strong action is necessary to protect Nova Scotians.”
Chief medical officer of health Dr. Robert Strang clarified Thursday that anyone planning to move to Nova Scotia can enter as long as they provide proof of residence or employment status.
For homebuyers, that proof of residency would include documentation showing an offer accepted on or before April 21, with a closing date of on or before May 20.
Nova Scotia has been experiencing a housing market boom in recent months, often attributed to the proliferation of people moving to the province from areas of the country harder-hit by COVID-19. These sales are often happening sight-unseen.
But even with the travel restrictions in place, Donna Malone, president of the Nova Scotia Association of Realtors, doesn’t expect much of an impact for out-of-province homebuyers.
“I don’t think it will result in more people deciding they don’t want to buy a home in Nova Scotia, if that was their intention all along,” she said.
“This is not the first time that (the province) brought in regulations that were temporary and took them off at a different point in time when things have improved. So I think things will improve and the time period will end.”
Malone noted the property sales cycle is usually about 30 to 45 days, so most people seeking to buy would be looking at a closing date after May 20 anyway. If someone had been planning to move to Nova Scotia, they would likely be willing to wait an extra few weeks to take possession of the property.
While out-of-province homebuyers have been blamed for pushing up the price of housing in Nova Scotia, Malone said the bigger issue driving the prices is the skyrocketing costs of building materials, meaning there’s more demand for houses that are already built and less demand to build new houses.
“So the cost of building a new home has gone up dramatically, and that has made resale homes more attractive,” she said. “That alone would have caused an increase in resale housing, even without a large inter-provincial migration.”
According to the Nova Scotia Association of Realtors, the number of houses sold in March 2021 was nearly 66 per cent higher than those sold in the same month last year.
What about out-of-province renters?
There are similar provincial entry rules for people looking to rent an apartment in Nova Scotia. They would need to show a minimum one-year lease signed on or before April 21 with the intent to take possession of the lease on or before May 20.
The announcement of the border restrictions left some landlords “scrambling” to get the leases signed in time for people to move, said Kevin Russell, executive director of the Investment Property Association of Nova Scotia.
But in general, they’re taking it “in stride.”
“We understand the reasons behind the premier’s announcement, so it is what it is,” he said. “We are moving into the busy season, but the fallout from the announcement … is manageable. It’s all about what’s going to happen moving forward.”
Since the end of the month is only a few days away, most people looking to start renting in May would have already had their leases in place. What’s unclear is what will happen for prospective tenants looking to move to Nova Scotia in June.
“So, we’ll have to see how this plays out,” said Russell, noting that there won’t be a shortage of Nova Scotians looking to rent in their own province.
“The demand is quite high in Halifax, both from out of province and local, and there’s a lot of inward migration happening from other parts of the province into Halifax, so whatever rental stock that’s available in the market will be absorbed during that period.”
Landlords trade rentals for sales
As the housing market continues to boom in Nova Scotia, Russell also said there are a number of landlords looking to sell their properties, rather than continue renting them out.
While the sky-high real estate prices may mean more profits for property owners, it also means Halifax’s already-tight rental market has gotten even tighter.
Russell blamed the phenomenon on the province’s rent cap, which was introduced last year to address tenants being priced out of their homes during the pandemic.
“Rent control has proven to be a disincentive for existing owners to remain in the business, and so they’re looking at the opportunity of selling and it appears that a growing number are taking up that opportunity to sell their property,” said Russell.
Russell said the issue is driven, in part, by a lack of supply. He said building more housing could help alleviate this problem in the future.
“There definitely isn’t enough rental supply stocks in the market,” he said. “We’ve been advocating for years that there needs to be incentives in place to increase affordable housing stock, and we just haven’t seen that happen as of yet.”