The Atlantic Canada housing market has been sizzling since the early days of the coronavirus pandemic. But what differentiates the real estate markets in New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador is how they have held steady, even as the broader Canadian real estate market experiences a correction.
Although there have been forecasts suggesting that the eastern provinces could join the downturn, the numbers so far show that real estate activity in this part of Canada is not imploding.
So, what do the data show? Let’s look at the latest trends in Atlantic Canada.
What’s Happening in the Atlantic Canada Housing Market?
Here is a look at the four major Atlantic Canada real estate markets:
According to the New Brunswick Real Estate Association (NBREA), residential property sales plunged 19 percent year-over-year, totalling 956 units in August. Home sales were relatively unchanged on a month-over-month basis. Year-to-date, home sales declined more than 15 percent from the first eight months of 2021.
New Brunswick real estate prices remained elevated in August, association data show. The MLS® Home Price Index (HPI), which is considered more accurate than average or median price measurements, surged 20.9 percent year-over-year to $287,600. Here is how specific housing types performed in August:
The average sales price of a home in New Brunswick advanced nearly 12 percent to $270,698. Moreover, the year-to-date average price climbed nearly 22 percent to $297,489.
Housing stocks weakened in August. New residential listings tumbled 3.2 per cent year-over-year, totalling 1,348 units. Active residential listings dropped 1.8 per cent, clocking in at 3,236 units. Months of inventory, which measures the number of months it would take to exhaust present supplies at the current rate of sales activity, rose to 3.4, up from 2.8 months.
According to Canada Mortgage and Housing Corporation (CMHC), housing starts have exceeded 2,700 year-to-date, up from 2,139 in the same period last year. There were 536 housing starts in August alone, up from 312 a year ago.
Newfoundland and Labrador
The Newfoundland and Labrador housing market recorded a 4.7 percent drop in home sales, totalling 667 units in August. Year-to-date, home sales have been roughly flat from last year’s span, totalling nearly 4,230 units.
According to the Newfoundland and Labrador Association of REALTORS® (NLAR), the benchmark price increased 8.9 percent year-over-year to $286,000 in August. The average price of homes sold in August jumped more than eight percent to $300,490, while the year-to-date average price surged 7.2 percent to $292,714.
Here are how the specific properties performed:
Inventories also fell sharply, creating tight market conditions for Newfoundland and Labrador. New listings plummeted 16.8 percent to a five-year low of 889 units, while active listings cratered 33.9 percent to a decade low of 3,069 units. Months of inventory tumbled from 6.6 in August 2021 to 4.6 in August 2022.
New housing construction activity has been vigorous in Newfoundland and Labrador, with 535 housing starts in the first eight months of 2022, up from 384 in the same span of 2021.
The number of residential properties sold declined at an annualized pace of 17.6 percent, totalling 1,181 units, according to the Nova Scotia Association of REALTORS (NSAR). Year-to-date, home sales tumbled 18.2 percent to 9,260 units compared to the first eight months of 2021.
Price growth was exceptional in the Nova Scotia real estate market, as the HPI composite benchmark price increased 17.8 percent year-over-year to $395,300 in August. Prices climbed for all main residential property categories:
The average sales price for a home in Nova Scotia jumped 9.7 percent to $385,935. The year-to-date average price surged more than 19 percent to $424,336.
Once again, supply pressures supported prices in the eastern province. The number of new residential listings slipped two percent to 1,589 units, while active listings climbed more than 13 percent to 3,531 units. It should also be noted that new listings were 4.8 percent below the five-year average, and active listings were 31 percent below the five-year average. Months of inventory came in at three, up from 2.2 months
Nova Scotia housing starts have been robust in 2022, soaring to nearly 3,300 from January to August, up from 2,784 last year.
Prince Edward Island
Prince Edward Island Real Estate Association data show that residential property sales slid 13.7 percent on an annualized basis, totalling 196 units in August. This was the worst performance since August 2015. Year-to-date, home sales dropped close to 13 percent compared to the first eight months of 2021.
The overall HPI composite benchmark price soared 17 percent to $372,700. The average price of homes sold in August advanced by 15.5 percent to $391,772, while the year-to-date average price soared more than 17 percent to $394,837.
Housing stocks were mixed in PEI, as new listings fell 7.7 percent to 323 units and active listings spiked 30.5 percent to 955 units. Both were below the ten-year average for the month of August, clocking in at 4 percent and 35.9 percent, respectively. Months of inventory increased to 4.9 by the end of August, up from 3.2 months at the end of August a year ago.
New housing construction has been subdued in the Prince Edward Island real estate market, with just 65 housing starts in August.
Must All Good Things Come to an End?
Can the Atlantic Canada real estate market sustain its momentum amid rising interest rates and national market uncertainty? So far, despite the wide range of bearish projections, this region is keeping it together amid tight supplies and affordability. Perhaps these provinces will be attractive places as long as the major urban centres are selling homes greater than the national average of around $520,000.
Source: RE/MAX Canada