Three Things That Aren't Going to Happen in the Nova Scotia Real Estate Market in 2023
Predicting the future is always a risky proposition, but that doesn't stop people from trying. In this blog post, we're going to take a look at three things that aren't going to happen in the Nova Scotia real estate market in 2023. Whether you're a homeowner or thinking of becoming one, it's important to know what to expect in the years ahead. So without further ado, let's get started!
1. Interest Rates will not decline in a significant way
With the start of 2023 upon us, many homebuyers are wondering what the year will bring for interest rates and wondering if they should wait for rates to fall before jumping into home ownership.
Unfortunately, rates will not decline in a significant way from where we finished in 2022. The Bank of Canada Overnight Rate started the year 2022 at .25%, before climbing steadily to end the year at 4.25%.
There is no indication that we will return to those .25% rates that we saw at the beginning of 2022.
In fact, the Bank of Canada started 2023 by raising the overnight rate by another .25%. While this is the last rate hike we should see for a while, the Bank of Canada has warned that they are prepared to increase rates further to control inflation if required.
So if home ownership is right for your timeline and finances, don't wait for rates to drop because they will not be returning to the numbers we saw in early 2022
2. House prices will not decrease in a significant way
Despite news of falling prices across Canada, the Director of Economic and Statistics for the province, Thomas Storring, predicts a soft landing for Nova Scotia.
Nova Scotia's demand for housing has been on a steady rise. In the last three years, Nova Scotia's increase in population has outpaced that of Canada, and residential housing stock has not yet caught up with population growth.
In fact, due to increased immigration, housing demand continues to be at the highest levels since just after the Second World War. The increased demand has put pressure on the current housing stock, and as a result, prices have stabilized or increased across the province. (We saw the median price in the province increase by 14.8% in 2022).
This increase in buyer demand will insulate Nova Scotians from any upset in the market caused by inflation and rising interest rates, which is great news for Sellers in 2023.
3. Sellers will not give away their homes
Despite suffering a dip in the housing market since Q1 of 2022, sellers still have power over the prices of their homes.
Many news headlines across Canada talk about decreases in home prices, but these claims may be lacking essential context.
Contrary to what may be seen in the headlines, sellers are in control of the sale price. Many sellers may not want to accept a low offer and are instead patiently waiting for an offer in line with the height of the market. This phenomenon is referred to as price stickiness, which is caused by powerful psychological factors that create resistance in sellers' minds when it comes to accepting less than what they initially expected.
This means that while market factors could be telling buyers otherwise, most sellers will not want to give away their homes at discounted prices. With this knowledge, buyers should keep an eye on the market trends in order to come up with realistic expectations when offering on a home.
It's always tricky to predict the future, but I've taken a shot at it with this blog post. As you can see, there are a number of factors that contribute to housing prices in Nova Scotia. And it's important to stay informed of these trends so you can make the best decision for your situation.
Real Estate Advisor based in Halifax, Nova Scotia. I help people buy and sell homes with Engel & Völkers.