A Look Ahead at the 2022 Halifax Housing Market
Thinking about buying or selling a home in the Halifax region this year? If so, after two years of pandemic restrictions, inventory shortages and escalating prices, you might be wondering what 2022 has in store? We asked RE/MAX nova broker Ryan Hartlen for his perspective on what’s coming and the best ways to respond to the new dynamics of the Halifax housing market.
Lack of available homes still a challenge
Ryan says he and many of the 160-plus agents at RE/MAX nova are heading into the new year with a sense of optimism tempered with a bit of caution, knowing buyers are in for another difficult year. That’s because many of the factors that influenced the market last year will continue in 2022.
“There’s a bit of hesitation there because of the lack of inventory and competition amongst buyers to get the few houses that are active,” he explains.
With housing demand still outpacing supply, it’s looking like another “heavily weighted seller’s market,” says Ryan. He doesn’t expect to see a lot of new listings come on the market and there’s still a lot of pent-up demand from buyers who have been searching for a while but haven’t been able to make a purchase.
On the positive side, he says we might see a return of military relocations and corporate moves that may have been on hold for the past couple of years. And that could bring a few more homes on the market this year.
Growing population means more buyers
Nova Scotia’s population reached a major milestone in 2021, hitting the one million mark.
The newcomers came from other parts of Canada and from different countries, as the province experienced another strong year for immigration, despite the pandemic.
And the growth is set to continue for many years to come. The government wants to grow Nova Scotia’s population to two million by 2060, which would require about 25,000 people to move here every year.
Ryan says population growth is going to drive the demand for housing, which is going to be a challenge due to the tight inventory of homes for sale coupled with a lack of available rental units.
“We’ve got some new construction happening, but it’s not like it used to be a few years ago. So, I think those two factors are going to continue to drive pricing, and I don’t think those things are going away anytime soon.”
Estimated price increase of 16 percent
Although Halifax real estate is still affordable compared to some Canadian cities, prices are rising fast. In 2021, the average price of a home in the Halifax region increased 26.8 percent across all property types – the price of a typical single detached home is now over $517,000.
Ryan says the market is most competitive for buyers looking for a detached house priced between $300,000 and $400,000, with some of those listings attracting 40 offers or more.
“Once you get houses in that kind of price point, the demand is just off the charts – that’s why it’s driving prices up because people are forced to outbid the other buyers.” He doesn’t see any let up in demand, which means prices will continue to rise in the coming year. In its 2022 Market Outlook Report, RE/MAX is predicting Halifax house prices will increase 16 percent.
Mortgage rate hikes expected in 2022
With the inflation rate at a 30-year high, many people expect the Bank of Canada to raise its benchmark interest rate this year. But Ryan doesn’t expect increasing mortgage rates to have a huge effect on the housing market in the short term, although he says they could become a bigger factor in the future.
“I think it will have an impact gradually over time because the price point to own a home and to service a home and to pay taxes continues to rise.” As that happens, he says, renting may become a more attractive option for some people. But with Halifax’s low vacancy rate, affordable apartments are hard to come by, so renting doesn’t seem like much of an alternative at the moment.
Intense market requires a solid game plan
Ryan’s main message to buyers is, “Be prepared – put yourself in a position where you’ve got things like paperwork and financing out of the way, so that you’re in a position to really act fast.”
He says it’s also important for buyers to be comfortable with competing offers and decide in advance what their top price is and which conditions matter to them most.
“For sellers, it’s really about making sure you get good, solid exposure on the market and strategizing on how you’re going to deal with the offers.” He says sellers should also consider what they want most out of the sale. Is it only the highest price, or are there other things that are important, such as a flexible closing date?
In this market, he says, things move quickly and the selling process can be intense. “So, having a plan of attack is definitely my best piece of advice.”
Whether you’re interested in buying or selling a home in Halifax in 2022, we’d be pleased to help you take the next step. Contact us today.
