In light of all of the talk I am hearing about the market being "down" n Halifax, I thought I would look at what the CMHC reports are telling us. Here's what I found:
NEW CONSTRUCTION: The overall pace of residential construction activity across Halifax is eased slightly this year, and is expected to finish with a total decline of 1.6% from last year. It is expected that new construction sales will climb 4% in 2009, reaching its highest level since 2004, supported by multi-residential construction . While the demand for single-detached homes is slowing, a trend which is expected to continue, the demand for multi-unit construction will continue to be strong for the next 1-1/2 to 2 years.
The decline in demand for new single-detached homes can be attributed to [mainly] three things:
- Changing demographics: smaller families and rising occurrence of more DINKS (double income no kids) and single-person homes.
- Rising costs: The cost of housing construction rose 14% when compared with 2006, while existing home sales rose only about 7% during the same period.
- Competition from the existing homes market: Existing home sales are only expected to increase by about 3% in 2009, creating competition for the new homes market.
RESALE MARKET: Keeping in mind that 2007 was a record year for MLS(tm) sales, we saw a decline in overall sales in 2008; inventory was weakened by the record sales of 2007, driving prices up prices in the first quarter of this year. 2009 sales look to be lower than the record year of 2007, but still relatively high when compared to previous years; prices are expected to increase approximately 3% in 2009, keeping the average price of an existing home about 30% lower than the average price for a new home. Increased inventory levels have helped keep growth below the 7-8% we have seen in previous years.
Overall, I think that while we are noticing that it is definitely slower, maybe we were just a bit "spoiled" by the successes of 2007. We are still on target with previous years sales, prices are still increasing, and there is a good inventory available. We traditionally see a slow-down at this time of year; this year shouldn't be, and isn't, any different. We have one of the most stable markets in Canada; we should be thankful for that.