In 2023, Nova Scotia's housing market experienced a decline in sales and a shortage of available homes, leading to increasing prices that make it difficult for many buyers to enter the market. The demand for housing in the $200,000-$300,000 range was strong, but limited supply in this range caused frustration among potential buyers. Single detached homes priced from $400,000-$500,000 were in high demand, selling faster than any other category.
Despite the rising prices, the volume of home sales declined, indicating the need for more affordable housing options. Chris Melnyk, a Realtor with Royal Lepage Atlantic, emphasized the importance of affordable housing, stating that many new homes remain on the market for months due to high prices.
Melnyk, who produces YouTube videos aimed at first-time home buyers and out-of-province buyers interested in Nova Scotia, noted that higher interest rates have impacted the mortgage approval amounts offered by banks. As a result, the most popular price range for buyers is below $500,000, but finding homes within this range, especially in Halifax, is becoming increasingly challenging.
Luxury home sales in Nova Scotia also experienced a slowdown, although prices continued to rise. Donna Harding, co-owner and broker at Engel & Völkers, revealed that sales of homes over $1 million in Halifax decreased by 16 percent, while the average cost increased by 13 percent. This inventory shortage poses a long-term challenge for Nova Scotia and Halifax.
The lack of inventory is further affected by homeowners choosing not to sell due to a shortage of viable alternatives. Denise MacDonell of Red Door Realty highlighted the issue faced by older homeowners who would typically downsize but are constrained by the high cost of rental accommodations that meet their expectations.
Amid these challenges, buyers are adapting their strategies. Many are sharing mortgages or opting for duplexes or homes with secondary suites that can be rented out for additional income. This shift in buying behavior offers a way to ease the financial burden of high mortgages and provides a safety net in case of job loss or economic uncertainty.
To address the housing crisis and lower prices, innovative solutions are needed. Harding emphasized the importance of creativity and suggested options such as building tiny houses and increasing the height of buildings in the city core. These changes require adaptation on a provincial, national, and global level.
In January, federal and Atlantic housing ministers recognized the potential of pre-fabricated homes as a strategy to alleviate housing shortages. This acknowledgment underscores the need for collective efforts to find sustainable solutions to Nova Scotia's housing challenges.
Realtor Chris Melnyk says he is seeing first-time home buyers splitting mortgages with friends to be able to afford to buy.
Donna Harding says she doesn't expect average prices to go down until the number of homes for sale rises.
