What is Store for Nova Scotia Real Estate Market in 2025?
Looking ahead, 2025 promises to bring some interesting shifts in the real estate market of Nova Scotia. Here’s an overview of key trends and their potential impact:
Price Trends
Modest Price Growth
Prices are not expected to return to pre-pandemic levels. Instead, we’re likely to see a moderate rise in home prices, with national forecasters predicting a 5% increase in average prices. This aligns closely with expectations for Halifax and surrounding areas.
Historically, such annual increases were typical and reflect a return to normal seasonal and year-over-year patterns. The COVID-19 years brought unprecedented year-over-year price increases, leaving home prices nearly $200,000 higher than in 2019. This lasting impact continues to challenge affordability for many buyers.
Impact of Rate Cuts
Anticipated Bank of Canada basis point cuts are expected to lower borrowing costs. First-time buyers, in particular, could benefit from extended amortization periods, while executive buyers may find opportunities in higher insured mortgage caps. Lower rates are also likely to stimulate moderate sales activity. This dynamic may balance the upward pressure on prices, providing some relief to affordability concerns.
These pricing trends highlight the interplay between affordability and borrowing capacity. Next, let’s explore how different housing segments are likely to fare in 2025.
Segmented Trends
Low-Rise Housing Developments
Low-rise housing developments, such as multiplexes, are projected to outperform single-detached homes due to their affordability. This trend is particularly relevant in rural and smaller communities, where remote work continues to enable migration away from urban centers.
Rural and Smaller Communities
Communities outside of urban hubs, which gained popularity during the pandemic, are expected to remain attractive. Affordable housing and flexible work arrangements continue to draw buyers to these areas, though a decline in housing permits for rural areas may slow new construction.This mixed trend warrants close monitoring.
Inventory and Market Activity
Gradual Inventory Growth
Inventory is gradually increasing due to situational factors. Many seniors, having relied on home care for the past decade, are now reaching a stage where selling their homes becomes necessary. Additionally, anticipated improvements to in-law suite grants may encourage more homeowners to list their properties.
Sales Activity
As borrowing costs decline and new government incentives for first-time buyers are introduced, sales activity is expected to pick up moderately, further stimulating demand. Buyers should remain aware of potential competition as activity increases.
Economic Trends
Unemployment
Unemployment is projected to rise slightly, with the national rate potentially reaching 7.5% in early 2025. While employment numbers increased by 91,000 in December 2024 (a 0.4% rise), most of the growth occurred in the public sector. Core-aged men (24-55) were the largest group entering the workforce, while women, youth, and private sector jobs saw no significant change. Self-employment increased by 0.9%.
Youth unemployment has risen significantly, with 25% of Canadian youth lacking job experience, up from 21% two years ago. This may limit entry-level homebuying activity. Additionally, the “gig economy” is expanding, with more people taking on side hustles to cope with financial pressures.
Financial Pressures
Rising mortgage rates are stretching household budgets, especially for those renewing at higher rates. This could add inventory to the market as financially strained homeowners look to sell. A potential U.S.-Canada trade war and ongoing geopolitical tensions could disrupt supply chains and construction material costs, further impacting affordability.
Economic Confidence
A weaker Canadian dollar and economic stagnation may dampen consumer confidence, reducing housing demand and increasing supply. However, the Bank of Canada has signaled an end to quantitative tightening (QT) by mid-2025, which could stabilize market conditions.
Immigration and Workforce
Immigration Targets
Reduced federal targets for non-permanent residents may impact rental demand and construction labor availability. However, Nova Scotia remains a key destination for skilled workers and newcomers through provincial nominee programs. The province is still seeing an exodus of workers to Alberta but gains retirees from Ontario and new buyers from the eastern U.S., drawn by the low Canadian dollar.
Aging Workforce
The construction industry faces a growing labor shortage as skilled tradespeople retire. One in five construction workers is expected to retire within the next 10 years, intensifying workforce challenges and potentially delaying housing projects.
Construction Market
Housing Starts and Permits
Housing starts show a mixed picture across the province. Halifax continues to experience growth in starts due to urban appeal and employment centers. However, rural areas have seen a decline in permits, though the number of units per permit has increased. Multi-unit developments, semi-detached homes, and townhouses dominate new builds due to their affordability.
Regulatory and Development Barriers
Despite zoning reforms in some municipalities, permitting delays remain a significant challenge, increasing construction timelines. Newly hired building inspectors, while necessary, have caused frustration among developers due to inexperience. Escalating development charges further deter new projects.
These challenges and opportunities point to the importance of strategic actions by stakeholders to shape a sustainable market.
Opportunities and Recommendations
Demographics of Buyers
Young professionals and empty nesters are expected to dominate the market in 2025. They will be drawn to properties that meet affordability and convenience criteria, including multi-unit developments, townhouses, and homes in rural areas within commuting distance to Halifax.
Prefer to Watch?
Call to Action for Stakeholders
The Nova Scotia real estate market faces a mixed outlook for 2025. Policymakers and industry stakeholders must address systemic issues such as labor shortages, affordability, and regulatory delays. Key recommendations include:
- Streamlining Permitting Processes: Reduce delays and improve efficiency by providing better training for newly hired building inspectors.
- Incentivizing Development: Offer subsidies or tax breaks for multi-unit developments to meet the growing demand for affordable housing.
- Addressing Workforce Challenges: Implement programs to attract and train skilled workers to mitigate the labor shortage.
- Supporting First-Time Buyers: Expand access to government grants and improve awareness of available programs.
Conclusion
For buyers, understanding affordability trends and exploring opportunities in rural or multi-unit developments could lead to more favorable outcomes. Sellers should monitor inventory growth and economic confidence to time their listings effectively.
By staying informed and proactive, all participants in the Nova Scotia real estate market can navigate the opportunities and challenges of 2025 with confidence.
Sources:
- Statistics Canada – Employment Trends
- Canadian Real Estate Association – Migration and Economic Data
- Bank of Canada – Quantitative Tightening Report
- Deloitte Insights – Construction Industry Outlook
- CANS Statistics Highlights
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