Halifax housing market stays strong
The flurr
y of sales activity that followed the billion-dollar shipbuilding announcement may be cooling off, but Halifax’s housing market remains strong.
A new report by the Canada Mortgage and Housing Corp. says positive economic activity, a growing population and low interest rates will lead to solid housing demand throughout 2012.
“Increases in economic growth and employment, along with positive migration to the city, will support demand for all types of housing in Halifax over the forecast period,” said Matthew Gilmore, a senior market analyst with the national housing agency, in an interview Thursday.
Existing home sales have increased significantly in Halifax since the shipbuilding announcement last October, trending about 20 per cent higher than last year, he said.
“So far this year, existing home sales in Halifax are up nearly 20 per cent but we expect this to level off to about eight per cent,” he said, adding that the agency forecasts muted sales growth of 1.6 per cent for 2013.
When asked if the spike in sales following the shipbuilding announcement was causing a bubble in the Halifax housing market, Gilmore said increased housing demand and price growth in the city is based on economic fundamentals.
Lars Osberg, an economics professor at Dalhousie University, said the heady optimism that followed the shipbuilding announcement has been given a dose of reality.
“Buying housing now on the strength of ships that won’t be built for years to come is a bit speculative,” he said. “When real people arrive needing real housing, the market will pick up again.”
Yet Osberg said the long-term housing trend for Halifax has been positive.
“There are other factors that will continue to create strong housing demand here,” he said, pointing to a steady economy, rural-to-urban migration and high energy costs making real estate on the peninsula more valuable.
Meanwhile, the average price of a home sold in Halifax this year is expected to increase six per cent to $275,000.
The pace of construction of new single-detached homes is gaining speed, with the agency forecasting a 22 per cent increase in 2012.
