A recent analysis by the fiscal watchdog in Ottawa revealed that in Halifax, the average house prices are 74% higher than what the typical household can comfortably afford. According to Louis Perrault, the director of policy, the affordability situation in Halifax has not improved since the previous assessment conducted in February 2022 and has either remained stable or slightly worsened.
In contrast to cities like Toronto and Hamilton, where affordability has shown improvement, Halifax stands out among the 11 Canadian cities investigated in the report for having the widest gap between house prices and what the average household can manage to pay. The report highlighted that while house prices have stabilized in some of the priciest metropolitan areas post-pandemic, they have continued to surge in markets like Halifax.
Reflecting on her experience in the housing market, Halifax Realtor Umme Sardar drew similarities between the current situation in Halifax and the competitive market she encountered in the Greater Toronto Area around 2002. Sardar noted a slight softening in the condo and high-end home market in Halifax but attributed the persistent price increase to demand consistently outpacing supply.
Despite efforts by the government to streamline housing starts and reduce bureaucratic hurdles, Sardar emphasized that more needs to be done to address the supply-demand imbalance. Data from the Nova Scotia Association of Realtors revealed that the average selling price for homes in Halifax-Dartmouth exceeded $600,000 in the first nine months of the year, marking a 3.9% increase from the previous year.
The report also examined the financial strain households face in purchasing a home based on mortgage debt service ratios, indicating that the situation in Halifax has deteriorated significantly compared to over a decade ago. Perrault highlighted that while Halifax’s debt service ratio is concerning, it is not as severe as in other regions like Vancouver, where households spend over a third of their income on mortgage payments for an average home.
Currently, a typical household in Halifax would allocate nearly one-fifth of their pre-tax income towards mortgage payments to afford an average house, almost double the ratio observed between 2012 and 2014, with a 33% down payment. Despite the challenges, Perrault noted that Halifax’s situation is comparatively better than other parts of the country in terms of the debt service ratio.
