N.S. home sales spike in June, despite predictions for pandemic-induced slowdown
Realtor association president says bidding wars increasingly common in Halifax
After a brief dip in real estate transactions because of COVID-19, listings in Nova Scotia rebounded last month and sales spiked, belying dire predictions from some experts.
The first cases of COVID-19 were reported in Nova Scotia in mid-March and a province-wide state of emergency, called on March 22, triggered most parts of the economy to slow.
For the next two months, the pandemic appears to have had a chilling effect on new real estate listings and sales, when looking at statistics reported by the Nova Scotia Association of Realtors.
In April, there were 60 per cent fewer new listings than in April 2019, making for the slowest April in more than 30 years. Sales for that month dropped about 47 per cent from the previous year.
In May, there were about 42 per cent fewer new listings than in May 2019, a 15-year low, and about 42 per cent fewer sales.
But June numbers show the market bucking the downward trend. Listings returned to within 10 per cent of last year's levels, and sales spiked by 30 per cent from the previous year. In June 2019, there were 1,427 real estate sales in Nova Scotia. In June 2020, there were 1,862.
Chris Peters, president of the Nova Scotia Association of Realtors, said there aren't enough listings to keep up with demand, so bidding wars are becoming increasingly common, especially in Halifax.
"I've seen and I've been a part of transactions that have had six, seven offers. I've also talked with my fellow colleagues that have had 30 or 40 offers on a single property," Peters said.
"You're getting a lot more buyers who recognize the fact that there isn't a lot of inventory out there. And if they're looking to own that property they're going to have to take a slightly larger risk in having to put up a little bit more than what the listing price is."
Peters said he sees no end in sight for the inventory shortage.
N.S. not seeing Crown corporation predictions pan out
In May, the Canada Mortgage and Housing Corporation predicted a "historic recession" for the housing market in 2020.
In a news release, the CMHC said it expected new construction, listings, prices and sales to drop and remain low until at least 2021.
"Sales are likely to register a decline in the range of 19 per cent to 29 per cent from their pre-COVID level before beginning a slow, gradual recovery in 2021," the federal Crown corporation said.
"Our forecasts indicate that sales are not likely to recover to pre-COVID-19 levels by the end of the forecast horizon."
It predicts prices to decline by nine to 18 per cent from pre-COVID-19 levels, recovering in the first half of 2021.
The CMHC released those predictions as part of a special edition of its housing market outlook, which looks at six major cities, Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal.
Affordability could be insulating Nova Scotia
The most the CMHC said about Nova Scotia was in a line about all of Atlantic Canada.
"Atlantic provinces will see relatively smaller declines in housing indicators when compared to other regions, as economic conditions will decline modestly compared to other regions."
Peters said Nova Scotia's affordability, relative to other parts of the country, has probably insulated it against a sustained downturn.
The Canadian Real Estate Association reported average home prices in Nova Scotia at just over $274,000 in May, while the national average is over $494,000.
"[Affordability] gives a lot of different options for different types of buyers in our Nova Scotia market," Peters said.
He said home-buying remains accessible to a lot of young people in Nova Scotia, and is attractive to people from other provinces looking for vacation properties.
The average Nova Scotia home price still crept up each month since COVID-19 arrived, but prices have also been increasing in the rental market, where vacancy is at a record low. Peters said he suspects more people are shopping for homes as the cost of renting increases.
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