Typically, Canada’s East Coast real estate market is less pressurized. In that, average prices trend lower than those seen in other parts of Canada, and demand is typically not as high as it is in Ontario, Quebec and British Columbia. However, cultural shifts over the last year or so have led many Canadians to relocate to the East Coast, spurring dramatic changes in these traditionally quiet real estate markets. The Nova Scotia real estate market has in particular felt the impact of the sharp uptick in activity, resulting from these shifting consumer trends.
While Atlantic Canada has always drawn swaths of tourists due to the breathtaking views, natural wonders and the relaxed lifestyle, the shift to working remotely has allowed Canadians across the country to embrace the vacation lifestyle year-round, while holding a job in another city or province.
As a result, the Nova Scotia housing market has experienced skyrocketing demand and bidding wars, even in the province’s smaller markets. While this is good news for the economies of smaller East Coast cities and towns, tightening market conditions are hindering the ability of locals to buy homes in Nova Scotia.
Nova Scotia Real Estate Closing in on Record Highs
Closing out a red-hot summer, the month of August saw the province of Nova Scotia record 1,362 homes sold through the MLS System of the Nova Scotia Association of REALTORS. While this is an 11.1-per-cent decrease compared to the 1,500-plus homes sold in August 2020, this past August ranked second in terms of highest sales for the month of August of all time. Comparatively speaking, this past August was a stellar month for the eastern province. Sales tracked 6.1 per cent above the five-year average and 25.1 per cent above the 10-year average for the month of August.
The high unit sales in August contributed to a record setting number of units sold on a year-to-date basis, from January to August 2021. Home sales in the first eight months of the year totalled 11,257 units, which is almost 31 per cent higher than the same period in 2020.
While home sales were setting records, the number of new listings had dropped off significantly. During the month of August 2021, there were just 1,605 new residential listings on the Nova Scotia real estate market marking 15.2-per-cent a year-over-year decline. New listings for the month were also 4.4 per cent and 7.1 per cent below the five- and 10-year averages for the month of August, respectively.
With sales outpacing new listings and the market becoming more strained, largely due to the influx of out-of-province prospective buyers, prices for residential property across Nova Scotia has been continually increasing for the last year – and August 2021 is no exception.
The average home price in Nova Scotia reached $350,463 in August 2021 – up 18.2 per cent year-over-year. Meanwhile, on a year-to-date basis, the average price of a home sold in the first eight months of 2021 was up 26.4 per cent compared to the same period last year, at an average sale price of $355,987.
Rising prices coupled with high unit sales has led to a new sales volume record for the month of August. In fact, the dollar value of all homes sold during the month was a staggering $477.3 million.
Will Cooler Weather Simmer the Nova Scotia Housing Market?
As the cooler weather rolls in, future conditions will depend on the number of new listings coming on stream. The province is sitting at the lowest number of active residential listings since the early 2000s, with just 2.3 months of inventory in August. In order for the Nova Scotia real estate market to cool down, inventory must increase to alleviate some of the upward pressure caused by high demand. With that being said, as climbing vaccination rates spur more businesses to open their doors to in-person working arrangements, it is possible that many homebuyers may start to reconsider the convenience of living close to the office, rather than living in another province. So much remains uncertain about what we hope to be the tail end of the coronavirus pandemic, so naturally, we’ll have to take a wait-and-see position on what lies ahead for the local real estate market.