Predictions for the Halifax Real Estate Market 2009
The New Year is upon us and who knows what is in store for 2009. 2008 was a tough year on everybody. With all the doom and gloom in the financial industry it is safe to assume that in 2009 we may be in for a rough ride here in Canada. Hot Real Estate markets like Calgary, Vancouver, and Fort Mac Murray have seen a drastic decline in the number of sales and prices have tumbled.
What is in store for us in the Halifax Real Estate market? In my professional opinion I think Halifax is positioned nicely to not feel the sting of this so called recession we are in. Last year we saw a 6.5% increase in average price and this year TD financial fore casted another rise in price but only by 2%. This is a modest increase but it is still an increase unlike other markets in Canada or the United States where the average price has gone down in some places by more than 50%.
I see the first half of 2009 being a buyer’s market, right now we are seeing record volumes of inventory and days on market has increased. Combine those two and there are deals to be had. Interest rates are getting close to an all time low which will help more buyers get into their next home.
If you are looking to buy a home this year make sure you get a Realtor to represent you in the transaction, it could be worth thousands of dollars in your pocket. A strong agent who understands this market is going to get you a better bang for your buck.
In the next few months look for new changes to my blog. In the meantime if you are looking to buy or sell Real Estate in Halifax, Dartmouth and surrounding areas you can email me.
Andrew Perkins
Your Halifax Real Estate Expert
Atlantic Canada Still Affordable/New housing starts down
With all the trouble surrounding the economy these days it is very nice to see a positive story for once. After reading this article, the next article I read was how housing starts are down over last year. It is hard sometimes to decipher what to think. As I have said before Halifax prices have had only modest increases over the last 10 years not like some of the other Canadian markets. I look for Halifax to continue this trend next year although probably not at the same pace. Check out the articles below.
Atlantic market Canada’s newest housing hotspot: RBC
EDITED BY STAFF, TRANSCONTINENTAL MEDIA
The Nova Scotia Business Journal
TORONTO – According to the latest housing report by RBC Economics, rapid price increases in the past two years have eroded Atlantic Canada’s affordability conditions, although some improvement is on the way in
2009.
“Forget the West. The new housing hotspots are in Atlantic Canada,” said Robert Hogue, senior economist at RBC. “St. John’s housing market is firing on all cylinders, trailing only Regina in terms of year-over-year price increases. Saint John and Halifax are also showing solid price momentum, creating favourable conditions for sellers.”
The RBC Housing Affordability measure for Atlantic Canada, which captures the proportion of pre-tax household income needed to service the costs of owning a home, improved slightly across all four classes in the third quarter of 2008 as the benchmark detached bungalow moved to 35.4 per cent, the standard townhouse to 30.3 per cent, the standard condo to 27.6 per cent and the standard two-storey home to 41.2 per cent.
The report noted that despite recent meaningful price gains across the region, housing affordability has not deteriorated excessively during the boom of the past two years. Affordability measures in Atlantic Canada currently stand only five to 13 per cent above long-run averages. Nonetheless, momentum in the region’s market is expected to wane in 2009 as economic uncertainty takes the wind out of its sail.
RBC’s Affordability measure for a detached bungalow for Canada’s largest cities is as follows: Vancouver 74.8 per cent, Toronto 53.3 per cent, Calgary 47.3 per cent, Ottawa 43.3 per cent and Montreal 40.4 per cent.
The report also looked at mortgage carrying costs relative to incomes for a broader sampling of cities across the country, including St. John’s, Saint John, and Halifax. For these cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account.
The Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condo. The higher the reading, the more costly it is to afford a home. For example, an Affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income. — Daily
Total housing starts decline in Halifax
EDITED BY STAFF, TRANSCONTINENTAL MEDIA
The Nova Scotia Business Journal
HALIFAX – Residential construction continued to moderate in Halifax Regional Municipality (HRM) last month as total starts declined 34 per cent compared to November 2007. According to Canada Mortgage and Housing Corporation’s (CMHC) preliminary data released today for Halifax, there were 118 total housing starts last month, compared with 178 in November 2007.
Single-detached starts recorded a 22 per cent decrease to 97 starts in November compared to 125 in November 2007. Multiples moderated to 21 starts last month – all of which were semi-detached or row housing starts.
“Although single starts were up 12 per cent year-over-year through the first three quarters in HRM, they were on average 16 per cent lower in October and November,” said Matthew Gilmore, senior market analyst with CMHC’s Atlantic Business Centre. “Our recent forecast called for starts to moderate in the fourth quarter and into 2009. The reasons for the decrease include the current economic environment, reduced spillover demand from the existing homes market and rising prices for new construction.”
In urban centres across Canada there were 12,780 total housing starts in November, 28 per cent fewer than the 17,816 starts in November 2007. There were 5,348 single-detached housing starts across Canada last month, 37 per cent less than the 8,490 single starts in November 2007. At 7,432 units, multiple housing starts represented a 20 per cent decrease from the 9,326 units started in November 2007. – Daily Business Buzz
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- Halifax Real Estate Market Update
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Andrew Perkins
Your HRM Real Estate Expert
Today I am going to look at the average price in the Halifax Real Estate Market for the last 8 years dating back to 2000. This should give you an idea of how the Halifax Real Estate market has fared over the years and where is it headed in the future.
|
Halifax Real Estate |
Average Price |
Number of Sales |
% Price Change |
|
|
|
|
|
|
2000 |
$120,161 |
5843 |
|
|
2001 |
$127,337 |
6484 |
+5.6% |
|
2002 |
$142,034 |
6943 |
+10.3% |
|
2003 |
$156,539 |
6424 |
+9.2% |
|
2004 |
$167,720 |
6777 |
+6.7% |
|
2005 |
$181,560 |
6925 |
+7.6% |
|
2006 |
$194,150 |
6679 |
+6.5% |
|
2007 |
$207,198 |
7493 |
+6.3% |
|
2008 |
$221,737 |
6039 |
+6.6% |
|
Totals |
|
59,607 |
+7.3 |
Source: MLS data
The Halifax Real Estate market has had a very steady rise in price since the turn of the century. The number of sales has remained relatively the same over that period. This year we are on pace to be slightly behind last year’s numbers which were a record. I do see this trend slowing a little in the future due to the financial turmoil in the world markets, however I think Halifax will still remain as one of the healthiest Real Estate Markets in Canada. Some of the factors that I feel gives the Halifax Real Estate Market such promise are;
1) Gateway port
2) Military/Navy
3) University city
4) Hub for Atlantic Canada
5) IT sector
When I say that the market is going to slow I am referencing the number of sales. I do not see prices going down in the foreseeable future. Now is not the time to wait for that to happen in Halifax. The prices here are far below other cities in Canada and have a lot of room to grow.
If you are in the market to buy or sell do not hesitate to contact me.
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Andrew Perkins
Your Halifax Real Estate Expert
Halifax Real Estate Market Report Multi Unit Buildings(4 units or less) based on MLS® data.
Today I figured I would look at something a little different. I have many clients who have and are actively looking for multi unit buildings as another way to enhance cash flow. There are things you need to look for when thinking of purchasing a multi unit rental. Firstly you have to make sure that the building generates income, a lot of multi units on the market today just won’t carry themselves and they are better served as an owner occupied so someone will help with the mortgage. I always advise my clients to look at the net income(rent minus heating, maintenance, and other expenses associated with the property). A general rule of thumb is if the net income is 10% of the purchase price it is definitely a building worth taking a closer look at. Secondly, what a lot of my clients look for and I recommend is electric heat and separate electrical meters. This way the heating and electricity of the units can be passed off onto the tenant. Obviously there are many other factors to look at but these are the main ones to keep in mind.
Lets take a look at the numbers over the years.
From Aug 20,2006 – Aug 20,2008 for area 1-40 which encompass all of HRM for multi unit buildings, 4 units or less.
number of sales – 330
average sale price – $274,920
number of days on market – 72 days
From Aug 20,2004 – Aug 20,2006 for area 1-40 which encompass all of HRM for multi unit buildings, 4 units or less.
number of sales – 282
average sale price – $247,671
number of days on market - 66 days
Looking at these numbers we can see that the same trend continues throughout the Halifax Real Estate Market. Average price continues to rise, an 11% increase. Number of sales are up 17% from the same period 2 years ago which goes against the trend in residential unit sales. Average days on market are up slightly.
What does all this mean? Well if you are in the market for rental units it may now be the best time as I don’t see the market going down anytime soon. Also the rental vacancy rate in Halifax is very low so there are a lot of prospective tenants out there. Rents continue to rise. If you would like more info on rental units or would like a market analysis done specific to your area, let me know.
Andrew Perkins
Your Halifax Real Estate Expert
