Fredericton Real Estate Spotlight in 2022

Despite the Fredericton real estate market taking a bit of a breather this year compared to the flurried activity of 2021, this segment of the Atlantic Canada housing market is still witnessing some of the highest sales totals and home prices on record. But can Fredericton sustain this growth in the post-pandemic economy? This is what industry observers are keeping an eye on.

Canada’s eastern seaboard is still benefiting from out-of-province migration and remote professionals looking to achieve home ownership in a budget-friendly environment. Compared to the rest of the country, the Maritimes has plenty of opportunities to purchase a home without breaking the bank, which many prospective homebuyers have had to do in today’s sizzling real estate market.

Now that the Bank of Canada (BoC) is being more aggressive on raising interest rates and the Canadian economy moving on from the COVID-19 public health crisis, is the Atlantic Canada real estate market moderating? Let’s take a look at some of the numbers.

A Spotlight on Fredericton Real Estate in 2022

According to the Real Estate Board of the Fredericton Area Inc., residential property sales tumbled at an annualized rate of 20.1 per cent in March, totalling 254 units. Despite the double-digit decline, home sales were still 20.5 per cent above the five-year average for this time of the year and more than 40 per cent above the decade average.

In the first three months of 2022, residential sales fell 18.4 per cent year-over-year, with 519 units changing hands.

Meantime, price growth has remained strong in the Fredericton real estate market. The real estate association’s data show that the MLS® Home Price Index (HPI), considered a more reliable measurement than average or median price gauges, advanced 31.1 per cent to $279,100 in March.

Both single-family homes and apartments enjoyed 31.2 per cent and 27 per cent annualized growth, respectively.

The average price of homes sold in March soared 24.8 per cent to an all-time high of $350,655, while the year-to-date average rose 24.3 per cent to $311,481.

Supply was paramount in the Fredericton housing sector, March figures highlighted.

The number of new residential listings dropped by 17.2 per cent year-over-year, coming in at 365 units. On a historical average, new listings were 1.8 per cent below the five-year average and 14 per cent under the decade average for this time of the year.

Active residential listings experienced a notable decrease, sliding 41.1 per cent with 285 units. The last time the metric was this low was more than 20 years ago. Meanwhile, active listings were 62.3 per cent below the five-year average and nearly 76 per cent below the 10-year average.

Months of inventory dipped to 1.1 in March, down from 1.5 months at the same time a year ago. They were also way under the long-term average of 7.6 months for the month of March. This is considered a crucial gauge since it reflects the number of months it would take to exhaust current inventories at the current level of sales activity.

The positive development is that new housing construction activity has risen substantially so far this year, according to Canada Mortgage and Housing Corporation (CMHC). In March the were 201 units, compared to just four in March of 2021. Year-to-date, the number of housing starts is up 244 per cent from the first three months of 2021, hitting 217 units.

What’s the State of Fredericton Housing Market?

Homebuyers who live in New Brunswick find it hard to acquire residential properties because supply is tight, and the bidding process has intensified over the last couple of years. From single-family humble abodes to tiny homes, prices have risen substantially in Fredericton and throughout the province. It has turned into an ultra-competitive real estate market, and nobody knows when conditions will relent, slow down, and normalize.

In recent months, several media reports have highlighted new developments in Fredericton. In addition to out-of-province buyers, many with pent-up equity from their previous properties, real estate agents note that people who are placing conditions on their bids are more than likely to lose their spot in line almost immediately. The other issue is that many properties are being sold over the asking price since these same out-of-province households can outbid locals, especially if they are previous homeowners from the significant real estate industries, such as Ontario and British Columbia.

With market conditions unlikely to change anytime soon, many industry experts anticipate higher prices and decent sales growth for the rest of the year, even with the central bank raising rates. Many Canadians are eyeing the Maritimes to plant new roots, which could elevate the local economy and create a new economic hub for the nation. It will be a riveting period for the East Coast.