For the first time in decades, the Maritimes are on the upswing in all key performance indicators.
While the shutdowns and restrictions related to the coronavirus pandemic have been a blow to the economy, Atlantic Canada has benefited from changing consumer habits that have resulted in a significant population boom. With more people working remotely and young families seeing the opportunity to realize their dream of home ownership at a lower cost compared to other areas, there has been a significant movement of inter-provincial migration to New Scotland, Prince Edward Island (PEI), Newfoundland and Labrador, and New Brunswick.
As more capital flowed into this region of Canada, it seeped into multiple industries, particularly the real estate market, which saw gains, sales activity at prices that had not not been seen for decades.
Let’s take a look at recent Statistics Canada data to see where households have moved.
Maritime provinces leading Canada’s population growth
For years, Canada’s east coast suffered a population exodus, as young graduates and professionals seeking employment opportunities headed to major urban centers like Toronto, Montreal and Vancouver. In the past two years, this trend has reversed.
In fact, the population of the Maritimes grew at a faster rate than that of the Prairies for the first time since the 1940s.
Here is an overview of the population figures from 2016 to 2021:
- Prince Edward Island: +8%
- Nova Scotia: +5%
- New Brunswick: +3.8%
It should be noted that much of this population growth took place in 2020 and 2021. For example, Nova Scotia experienced the second largest population increase in the country thanks to interprovincial migration in the second quarter of the year. last year, totaling 4,678 people. As another example, Statistics Canada has confirmed that the Maritimes recorded a cumulative gain of 13,470 people in the third quarter.
So what’s behind the Maritime population boom?
“First, New Brunswick, Nova Scotia and Prince Edward Island welcomed record numbers of immigrants from 2016 to 2021, with the vast majority arriving before the pandemic. Although approximately one-third to one-half of those who immigrate to the Maritimes move to another province within five years of arrival, higher immigration levels were still primarily responsible for the rebound in population growth since 2016,” noted the statistics agency.
In addition, for the first time since the period from 1981 to 1986, “more people moved to the Maritimes from other parts of Canada (134,841) than people who moved (98,086). The positive influx of people into these provinces from elsewhere in Canada began before the pandemic, but intensified thereafter.”
British Columbia was the other province to experience a massive population increase.
The Maritime real estate market in 2022
The developments have also had an incredible effect on the local housing market. Industry insiders note that many homebuyers came from Ontario and bought residential properties without even seeing the homes. But stocks couldn’t keep up with the influx of demand.
According to Nova Scotia Association of Realtors® (NSAR), home sales fell 16.2% in January year-over-year, totaling 704 units. But residential real estate transactions were 5.8% above the five-year average.
Despite the drop in home sales, the average price of properties sold in January rose 23.2% year over year, to a high of $392,828.
Active residential listings fell 37.4%, while new listings fell 16.6%. Months of inventory, which track how long it would take to exhaust current supply at the current rate of sales, slipped to start the year.
Prince Edward Island
The Prince Edward Island real estate market saw a 4% year-over-year increase in sales in February, marking a high point for the month of February. Prince Edward Island Real Estate Association Noted home sales were also 22.5% above the five-year average. The average price of homes sold in February rose at an annualized rate of 8.5% to $354,280.
New residential listings rose 28.4% year over year, while active listings rose a modest 3.3% year over year. Active listings were 29.3% below the five-year average and 59.1% below the 10-year average. Inventory months were flat year-over-year at 2.8.
According to New Brunswick Real Estate Association, residential property sales fell 6.3% year-over-year in January as 621 units changed hands. But home sales were still 4.8% above the five-year average.
The MLS® Home Price Index (HPI), considered more accurate than average or median price measures, rose 32% to $275,000 in January. Additionally, the benchmark price for single-family homes climbed 32% to $277,200.
New listings fell by 20.8% and active listings by 42%. On a historical basis, new listings and active listings were respectively 28.3% and 59.6% below the five-year average.
Can the Maritimes support this growth?
Many housing experts and policy makers have wondered if the Maritimes can sustain this growth and retain people who have immigrated to the region. This was a unique opportunity for the Eastern region, and many officials in places like Halifax proposed new economic developments.
RE/MAX’s 2022 Canadian Housing Market Outlook Report predicted that many of Atlantic Canada’s major real estate markets would experience notable price growth.
Here is a snapshot:
- Moncton: +20% to $332,734.80
- Halifax: +17% to $543,890.88
- Fredericton: +5% to $268,722.30
- Charlottetown: +8.5% to $409,207.75
- John’s: +5% to $338,114.70
- Saint John: +7.5% to $276,885.60
At the same time, housing affordability has become a pervasive topic of discussion in the Maritimes. Prices are still below the national average, especially compared to many cities people come from, like Toronto and Ottawa. But ultra-low borrowing costs, limited inventory and strong demand could exacerbate the affordability issue.