A combination of improving economic conditions, lower unemployment, and first-time homebuyer incentives should position Atlantic Canada’s housing market for growth.
The RE/MAX Atlantic Canada Market Report forecasts solid growth for the region based on an analysis of 15 markets in the first quarter of 2019 compared to a year earlier.
“Consumer confidence is on the upswing in Atlantic Canada and that is translating into stronger home-buying activity in residential real estate markets," says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada Region.
First-time buyers were a driving force in 10 of the 15 markets included (70%).
"First-time buyers – many of whom are Millennials – are behind the push for housing, with many seeking to capitalize on the low interest rate environment along with provincial government assistance programs before values climb," added Alexander.
These programs include repayable loans of up to 40% for an existing home (New Brunswick's Home Ownership Program) to government grants of $3,000 for qualifying individuals or families (Newfoundland and Labrador's Home Purchase Program).
The federal government also recently announced changes to its existing Home Buyer's Plan, allowing first-time buyers to withdraw $35,000 (up from $25,000) from their Registered Retirement Savings Plans to finance the purchase of a home.
The incentives and economics may be welcomed but the increased demand is clashing with supply challenges, which is low in 80% of markets.
Starter homes are particularly sought-after with sales strongest at starter price points ranging from $100,000 to $300,000.
"These programs are breathing new life into smaller communities, and demand has outpaced supply, leaving realtors scrambling to find new listings for their clients," said Alexander. "In some cases, first-time buyers are vying against out-of-province buyers for product."
Population growth in Newfoundland and Labrador and New Brunswick includes an influx of people returning home after working in Alberta's oil sector.
"The Atlantic Region traditionally has the highest rates of home ownership in the country and we don't expect that to change anytime soon," concluded Alexander. "Greater economic prosperity (the Maritimes are expected to lead the country in GDP growth in 2019), combined with interest rate stability and first-time buyer incentives are tipping the scales in favour of home ownership yet again."
More market update: