Halifax housing slows, but rental demand still up

Posted on 11. May, 2010 by in News

By ROGER TAYLOR Business Columnist
Tue. May 11 – 6:50 AM
Housing statistics released Mon­day show that Halifax continues to have the strongest housing market in Nova Scotia by far.

Halifax housing prices grew by about five per cent during the first quarter this year, compared with the same period last year.

But housing market expert Mat­thew Gilmore says prices aren’t likely to continue rising at the same rate for the rest of the year.

Gilmore, a senior market analyst with Canada Mortgage and Housing Corp. in Halifax, says he is expecting price growth to slow down to about three to five per cent as the year pro­gresses. That growth rate is lower than it has been for most of the last decade.

“Last year was little bit slower, but previously, we were averag­ing six to seven per cent (growth) for 10 years.”

The Halifax market was slow­er during the first quarter of 2009 due to economic uncertain­ty, so the price growth experienced so far this year looks more pronounced than it otherwise would, he says.

“There’s about a $100,000 price difference for an average existing home and an average new (one). The average existing (home) is about $240,000 and the average new (one) is about $340,000. That gives you some indication that what we build is just a little more elaborate than what’s available in the existing home mar­ket.”

April statistics from CMHC for Halifax show there were 223 housing starts last month, more than twice the 84 starts record­ed in April 2009. Construction of single­family homes started in April increased to 80 from the 66 starts recorded in April 2009.

And in the apartment-building category, 143 units were started in April, compared with 18 units during the same month last year.

In Cape Breton Regional Municipality, construction was started on only 10 single­family homes in April, and there was no apartment construction. If you subtract the Halifax and Cape Breton starts from pro­vincial statistics for all urban centres with populations of 10,000 or more, there were only 13 single-family homes started in the rest of Nova Scotia in April.

The housing statistics provide more evi­dence that Halifax continues to grow as people migrate to jobs and take advantage of other opportunities.

So far this year, there have been 689 hous­ing starts in the Halifax area for the period that ended April 30, compared with 358 starts in the first four months of 2009. That may not be a fair comparison, considering that the first four months of last year were at the height of the financial crisis.

But Gilmore says the starts so far this year are more in line with housing construction in 2008 and 2007.

“If we look at total starts, we’re sitting at 689. In ’08 at this time, we had 605 (starts), and the year before that, we had 560,” he says. “We have more people moving to Hali­fax than moving away. When you’re talking local people . . . they tend to be younger, in the 20-something age group, and that is one of the largest sources of new people to the city.”

When you add a growing immigrant pop­ulation to that, Gilmore says it creates rental demand.

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