Halifax’s real estate market is red hot. According to the Nova Scotia Association of REALTORS, home sales totaled a record 8,407 units over the first six months of the year.
Houses are selling within days, and not only are they going fast — they’re going for a lot. Across the province, the average price of homes jumped about 30 per cent from 2020.
In Halifax, that means this June, the average house price sat at $436,400 — over $114,000 more than the average house price in the area last year.
“It’s absolutely abnormal,” said RBC Senior Economist Robert Hogue.
“I don’t think we can find any other time in history that prices have increased so much, at least in dollar terms.”
READ MORE: ‘Desperate to win’: Red-hot Halifax housing market has some buyers forgoing home inspections
The problem is not unique to Nova Scotia. Across the country, house prices have been on the rise for years and while they have been creeping up in Nova Scotia recently, the spike in the last year has been dramatic, especially having an impact on first-time home buyers.
“It’s challenging,” said Matthew Dauphinee, vice-president of The Nova Scotia Association of REALTORS.
Things really started to change in 2019, with interest rates for mortgages dropping and rents increasing. That’s when more people started considering the benefits of owning rather than renting.
“Back in 2019, it was a good option. Fast forward to today we have lower inventory than before. It’s challenging to find a place,” Dauphinee said.
In addition to having lower inventory, Nova Scotia’s population keeps growing. Halifax’s population growth is outpacing nearly every city in the country, creating more demand for housing.
Then the pandemic hit and with less to do, more people realized the value in having their own space.
With lots of people looking to buy and inventory so low, it creates a market with bidding wars.
Across the province over the last year, bidding wars have become more common and often, houses are going for $50,000 to $100,000 over the asking price — something that puts young first-time home buyers, who don’t have the same capital as homeowners or those who have been saving longer, at a disadvantage.
It’s the challenge that Amy Mielke and her partner Patrick Jerrette are currently facing,.
“We can’t compete with cash and we can’t compete with lots of cash so definitely getting priced out,” said Mielke.
The couple currently rents a place on the Halifax peninsula. The hope was to stay close by, preferably in the North End, but with current house prices they say they’re getting pushed out.
“One house we really liked, we found out it had 12 offers, and I think it ended up going $100,000 over, which just priced us out,” said Mielke.
Dauphinee says he understands the struggle for first-time home buyers and says one thing that may help is reconsidering the deed transfer tax for first-time home buyers.
Currently the deed transfer tax is due within 10 days of closing on a house purchase and costs about 1.5 per cent of the house price. For an average Halifax home, that’s about $7,000.
“We’ve seen other provinces like P.E.I. or B.C. loosen the rules,” said Dauphinee.
“They could evaluate the price of your home and modify the tax you pay to the point of possibly waiving it or spreading it out over an extended period of time.”
So far, it’s not something that’s been talked about by any of the political parties during this election. Liberal Leader Iain Rankin says that supply is at the crux of the issue.
“So we’re going to continue to work through the recommendations of the housing commission to make sure we’re building up that supply,” he said at an event on Wednesday.
PC Leader Tim Houston has also spoken about the need to increase housing supply.
“We need to make sure we work with not-for-profits and developers alike to incentive them to build and help them build more stock,” said Houston on Tuesday.
The NDP has taken a different approach, touting their rent control policy as a solution to help people save.
“How many people do we know that year after year, are forestalling their plans to get a down payment because their rent made it impossible for them to build up a nest egg to be able to do that,” said NDP Leader Gary Burrill.
Mielke and Jerrette say they don’t have a solution to the challenges they’re facing as first-time home buyers and while they acknowledge they’re in a privileged position to even be considering purchasing a home, they say that any help they could get would be welcome.
“For a lot of our peers, we’ve grown up in Nova Scotia and made Halifax our home and chosen careers we can do here,” said Mielke.
“It’s a little disheartening to know that maybe we won’t be able to buy a home where you grew up and try to make a life here because we’re being squeezed out.”
Comments