Overview

Housing starts are forecast to decline in 2009 in Atlantic Canada but rise marginally in 2010. Stability in singles activity in 2008 will be replaced by a slowdown in activity in 2009, as economic uncertainty continues to impact the housing sector. As well, the anticipated increase in multiple starts in 2008 did not materialize.
The expectations for 2009 have also been reduced, as the appetite for development moderates in the current economic environment. The entire region will face challenges in 2009, as weakness is expected to prevail in all four Atlantic provinces.
The housing sector is expected to show positive growth in 2010, as consumers begin to regain their footing and a recovery begins to take hold.

Prices Continue to Rise

The price of existing homes continued to increase in 2008, with prices rising over seven per cent.
Although inventory levels only rose marginally in 2008 and inventory is not anticipated to increase significantly in 2009, it is expected that the growth in prices will moderate, as the market continues to slow.

New home prices were also up in 2008 in the two to three per cent range in many of the large urban centers in Atlantic Canada. Although Halifax and St. John’s had greater increases, due to the effects of tighter labour conditions, increases in land prices and greater demand for above average priced homes. As the trend for both inter-provincial and international migration remains positive, 2009 will be a year of better labour conditions. Thus, labour prices should become less of a factor in the growth in new home prices in the near term.

MLS® Sales to Decline

In 2009, Moishe Alexander expects existing home sales activity to decline across the region. The overall level of sales activity will be impacted by softness in employment and economic growth. There is some downside risk to the forecast, as consumers remain cautious and income growth is not expected to be as strong in 2009. As well, global factors could continue to affect the outlook in 2009.