A recent analysis conducted by Ottawa’s fiscal watchdog revealed that in Halifax, the average house prices are 74% higher than what the typical household can afford. According to Louis Perrault, the director of policy, the affordability situation has not shown any improvement since the previous assessment in February 2022, remaining stagnant or even worsening.
In contrast to cities like Toronto and Hamilton, where affordability has seen positive changes, Halifax stands out among the 11 Canadian cities examined in the report for having the largest disparity between house prices and what the average household can manage financially.
The report noted that while house prices in some expensive Census Metropolitan Areas (CMAs) have stabilized post-pandemic, Halifax has experienced continued increases in its housing market.
Real estate professional Umme Sardar, recalling her early career in the Greater Toronto Area, compared the housing market dynamics to those seen in Halifax during the initial phases of the COVID-19 pandemic. Sardar mentioned a slight softening in the condo and high-end home segments in Halifax but attributed the ongoing price escalation to persistent demand surpassing available supply.
Despite efforts by the government to streamline housing starts by reducing bureaucratic hurdles, Sardar believes more needs to be done to address the housing shortage and affordability challenges, describing it as a catch-up process.
Data from the Nova Scotia Association of Realtors revealed that the average home price in Halifax-Dartmouth exceeded $600,000 in the first nine months of the current year, marking a 3.9% increase from the previous year.
The report also analyzed the extent to which households stretch their finances to purchase homes, focusing on mortgage debt service ratios. Perrault highlighted a significant deterioration in this aspect in Halifax over the past decade, with households now allocating nearly one-fifth of their pre-tax income towards mortgage payments for an average home, almost double the ratio observed between 2012 and 2014.
While the debt service ratio in Halifax is concerning, Perrault noted that it is comparatively better than in other regions like Vancouver, where households dedicate over one-third of their income to mortgage payments for an average property.
