Halifax’s Real Estate Market Needs Immigrants. Here’s Why.
For the first time in years, Halifax’s real estate market finds itself in the green.
The Canada Mortgage and Housing Corporation (CMHC) recently bumped the national risk rating to its highest level and included a number of Canadian cities in the red and yellow zones for risk categories like overheating, price acceleration, overvaluation and overbuilding. Halifax’s real estate market, however, is in the green across all categories—thanks in large part to the boom in immigrants and refugees.
So why is immigration so beneficial for Halifax’s real estate market? And how can embracing immigration continue to grow our city’s economy?
First, we need to understand a few details about the link between real estate and population:
A city’s population really matters in the real estate market.
Research has found that the bigger a city’s population, the more appreciation in the real estate market. However, the 2016 census for Nova Scotia isn’t painting a good picture for Nova Scotia’s population.
The 2016 census showed that Nova Scotia had the second lowest rate of growth in Canada since the last mandatory short-form census back in 2011. Compared to other provinces, our population growth rate of 0.2% was significantly lower than the national average of 5%.
That’s one of the worst growth rates in our history so far. Yikes.
But here’s the good news—the arrival of new immigrants is filling that gap.
There are two important facts you need to know:
For the past few decades, Nova Scotia saw anywhere from 2,000-3,000 people leave the province every year. In October 2016, that number was only 400.
Two and three years ago, Nova Scotia welcomed 1,400 new immigrants and refugees each year. But in 2016, we had over 4,300 new arrivals. That’s more than 3 times our average in the past several years.
As a result of this influx of people, Halifax’s real estate market is benefitting immensely.
Immigration is hard to measure—which means your home appreciates in value.
Allow me to explain. There are some numbers related to population that we can measure to predict housing needs. For example, these numbers include births versus deaths per year.
Unfortunately, the arrival of new immigrants is difficult to predict. Usually, this means that builders don’t take into account immigration predications, and so they under-build on new homes.
A shortage in housing means homes for sale are more in demand, and Halifax’s real estate market thrives. This shows that we have a lot to gain by an increase in new arrivals to our city and province.
We can keep ourselves in the green—but it will take some work.
Despite our low growth rates compared to the national average, we have a chance to recover. New arrivals to our province are already taking these steps for us. Now it’s just a case of keeping the momentum alive.
A positive growth rate in our province will greatly benefit our economy—most notably, it will keep appreciating the value of the Halifax real estate market.
So, welcome immigrants to our city with open arms, and encourage them to invest in our housing market once they’re here. All members of our society win when our national housing risk rate stays in the green.;