CMHC Housing Market Outlook: Insights from Chisholm Group

As we navigate through 2024, the Halifax real estate market is poised for a significant transformation, spurred by population growth and the anticipated easing of interest rates over the next few years. At Chisholm Group, we've analyzed the latest CMHC 2024 Housing Market Outlook to offer a concise guide to what homeowners, investors, and builders might expect through to 2026.

Overview of Key Trends

The period from 2024 to 2026 is expected to see a rise in home prices, sales, and construction starts. The driving forces behind this positive change include not only the population increase but also a likely decrease in interest rates, which could rejuvenate market activities and provide new opportunities for buyers and investors.

Rental Market Dynamics

One of the most noteworthy trends is the increase in multi-unit rental constructions, primarily designed to meet the soaring demand in Halifax. With record numbers of rental units currently under construction, this boom is a response to the low vacancy rates and the heightened need for rental housing. Although this should help ease some pressure in the rental market once these units are completed, rents are still expected to rise further due to the ongoing demand.

Challenges in Construction and Costs

In 2023, building costs for single-detached homes in Halifax increased by more than 10%, the highest rate among major Canadian cities. These rising costs, along with higher land prices, have led to record-high new home prices, which in turn have curtailed buyers' borrowing capabilities. Although a gradual increase in the construction of single-detached homes is anticipated from 2025 to 2026 due to potential interest rate reductions and expected growth in household incomes, the construction sector continues to face challenges such as labor shortages and increasing costs, which could delay or resize some planned projects.

Market Outlook and Future Sales

Despite a slow market in 2023 caused by high interest rates and a tight economic setting, the Halifax housing market is expected to experience a rebound. Sales are likely to improve as economic conditions ameliorate, with lower interest rates and more stable home prices encouraging sidelined buyers to re-enter the market. However, there is a risk that if home prices rise more sharply than anticipated, it could dampen the expected surge in sales.

Rental Pressures and Opportunities

The vacancy rate in Halifax is projected to remain low over the next few years despite the increase in the supply of rental apartments. The adjustment of the Nova Scotia rent cap from 2% to 5% in 2024 will likely contribute to continued rent increases, influencing both tenants and property managers. As rents increase, rental affordability may worsen, signaling a crucial area for investors to watch.

Closing Thoughts

Halifax’s housing market is bracing for an exciting phase of growth and challenges. For buyers, the upcoming period might present a prime opportunity to purchase properties, especially with the potential for decreasing interest rates. Investors, particularly in the rental market, will find significant opportunities given the ongoing demand and rising rents.

For more insights and detailed analysis, trust the Chisholm Group to guide you through Halifax’s dynamic real estate environment.