New Brunswickers shouldn’t expect to see price drops similar to places like Greater Toronto despite the Bank of Canada latest interest rate hike, says economist Richard Saillant.
“New Brunswick is bucking the trend,” he said in an interview on Wednesday.
New Brunswick’s real estate situation is unique because housing prices have been significantly less expensive than the rest of the country for quite a while, he said.
“The Maritimes, with its low home prices, seem to be an interesting destination for the ‘southern Ontarian housing refugees’ as I call them,” he said. “The last full year of data, New Brunswick has seen an explosion of population from other provinces like it’s almost never seen before.”
Realtor Heather FitzGerald, who has been in the business in southeastern New Brunswick for 16 years, agrees with that assessment, saying prices may plateau, but she doesn’t expect to see them come down as a result of the hikes.
She has seen rate hikes discourage some buyers from entering the market as it means they may only get pre-approval for a smaller mortgage.
“What we’re seeing is a lot of buyer fatigue,” she explained on Wednesday. “They’re in competition with 12 to 20 or plus offers and they’re getting tired of that. So they’re pulling back a little bit,” she said, adding that even out of province buyers were also pulling back, due to some companies recalling employees to the office.
New home owner Christophe Goulet-LeBlanc bought his Dieppe house with his fiancée in 2021, in part, because interest rates were so low at the time.
“Interest rates were great but the houses didn’t reflect that. So we figured we should do it now, almost like a panic-buy situation,” he said on Wednesday.
While he has a fixed rate mortgage that won’t be up for renewal for another four years, he said the rate hikes still cause some anxiety.
“We kind of wanted to be safe but once that safety barrier is gone, are we going to be stuck with incredibly high interest rates, where it’s going to make payments no longer affordable?” he said.
“I have friends even in this city that are saying that they might have to sell their house,” he added.