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Expert: Shipbuilding deal will heat up Halifax market in about 18 months

The Halifax area is on the cusp of a real estate renaissance that will see average rents and home prices begin a slow and long-lasting rise, real estate guru Don R. Campbell said Monday.

“It’s going to be a slow and healthy sort of increase in real estate values, and not the boom-and-bust sort of cycle that we’ve seen in some western communities in the past,” said Campbell, president of the Real Estate Investment Network of Vancouver.

A heated Halifax real estate market will be one of the first notable spinoffs of the $25-billion deal that Irving Shipbuilding Inc. has secured with the federal government.

“If people are interested in getting into the market, they probably have about an 18-month window before the impact of the job and population growth first begins to be felt,” Campbell said.

“Other centres like Sydney and Moncton will also experience increased demand as they benefit from secondary manufacturing further down the road, and it will also be interesting to see how quickly prices begin to rise in communities surrounding Halifax.

“A lot of people will want to take advantage of increased values in the city and opt for a smaller mortgage or will want to live mortgage-free in the outlying areas.”

GPD growth is at the heart of the vibrant real estate market, Campbell said, and there is every reason to believe the Halifax market will soon have more people hunting for rental accommodation and housing, meaning increased prices.

“The good thing for Halifax is these shipbuilding jobs are of a long-term nature,” he said. “It’s not like a major oil project that attracts thousands of workers and suddenly lets them all go.

“It’s a major project that is going to revitalize a large part of the economy of the Maritimes.”

First there will be a shortage of rental accommodation in Halifax, followed by rent increases, and then a similar pattern with housing costs, Campbell predicts.

It’s likely some speculators are already active in the relatively small Halifax market, and these buyers will likely profit from their investments.

“You’ll see rents go up before the end of the year, and then 18 months from now you’re going to see the upward pressure on real estate values,” he said.

Campbell said the shipbuilding contract will be great for the city, but traffic will get worse and many employers will have to pay workers more as unemployment numbers decline.

“With the renaissance will come increased demand for apartments and housing,” he said. “There will also be increased pressure on infrastructure and community services.”