Halifax’s housing market has been described as “red hot” with houses receiving numerous bids — most over asking.
HaliPad RealEstate Owner and Broker, Chris Perkins said that trend is continuing in 2022. In February he says an average house went for 26 per cent over asking.
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Perkins says things are slowing a bit though the market is still not going down.
This comes as inflation and interest rates continues to rise.
“So it’s pretty much a one-sided loss that anyone who’s borrowing money for any reason is probably suffering right now,” said Moshe Lander, an economics professor with Concordia and Dalhousie Universities.
“So if you have a line of credit you’ve already noticed it’s gone up. If you have a variable rate mortgage it’s already gone up, if you have credit card debt it’s gone up.”
As interest rates increase people generally have less borrowing power.
“If you were hoping your mortgage payment was going to be $1,000 dollars a month, it’s now going to be $1,200,” said Lander.
And ultimately rate hikes will impact the housing market.
“It’ll take the air out of it,” said Lander.
Perkins says despite everything, Halifax remains a sellers’ market, and that’s largely because of supply. Currently there is about 1 to 1.5 months worth of supply in the market.
“A balanced market is three to six months,” said Perkins.
We would need inventory to triple in order for us to be in a balanced market.”
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But even in the sellers’ market, Perkins says there has been a shift. Sellers should no longer expect outrageous bidding wars, and they should price their houses for what they’re worth.
“Don’t undervalue your property to create an artificial bidding war,” he said.
As for buyers, Perkins says people may need to adjust their expectations as what they can afford is likely changing with rising interest rates.
“It’s not about over leveraging yourself, it’s about making sure you make the correct decision. Doesn’t matter what the markets doing you just need to make sure you have all the information so you can make an intelligent choice.”
For those who have purchased recently, both Perkins and Lander say if the house was purchased to live in, it should still be considered a good investment.