For the first time in decades, the Maritime provinces are booming in every key performance indicator.
While the coronavirus pandemic lockdowns and restrictions were a hit to the economy, Atlantic Canada benefited from changing consumer patterns that led to a significant population boom. With more people working remotely and young families seeing an opportunity to achieve their dream of home ownership at a lower cost relative to other regions, there was a substantial inter-provincial migration movement to Nova Scotia, Prince Edward Island (PEI), Newfoundland and Labrador, and New Brunswick.
As more capital flowed to this region of Canada, it seeped into multiple industries, particularly the real estate market, which experienced gains, from sales activity to prices that had not been seen in decades.
Let’s peek at recent Statistics Canada data to see where households relocated.
Maritime Provinces Leading Canada’s Population Growth
For years, Canada’s East Coast had endured a population exodus, as young graduates and professionals seeking employment opportunities headed to major urban centres such as Toronto, Montreal and Vancouver. Over the last two years, this trend turned around.
In fact, the Maritime population expanded at a faster pace than the Prairies for the first time since the 1940s.
Here is a look at the population numbers from 2016 to 2021:
- Prince Edward Island: +8%
- Nova Scotia: +5%
- New Brunswick: +3.8%
It’s notable that much of this population growth took place in 2020 and 2021. For example, Nova Scotia witnessed the second-highest population increase in the country thanks to inter-provincial migration in the second quarter of last year, totalling 4,678 people. As another example, StatsCan confirmed that the Maritimes recorded a cumulative gain of 13,470 people in the third quarter.
So, what is behind the population boom in the Maritimes?
“First, New Brunswick, Nova Scotia and Prince Edward Island welcomed a record number of immigrants from 2016 to 2021, the vast majority arriving prior to the pandemic. Although approximately one-third to one-half of those who immigrate to the Maritimes move to another province within five years of arrival, higher levels of immigration were still mainly responsible for the rebound in population growth since 2016,” the statistics agency noted.
Moreover, for the first time since the period of 1981 to 1986, “more people moved to the Maritimes from other parts of Canada (134,841) than moved away (98,086). The positive influx of people into these provinces from elsewhere in Canada started prior to the pandemic but has intensified thereafter.”
British Columbia was the other province to witness a massive jump in population.
The Maritimes Real Estate Market in 2022
The developments have also had an incredible effect on the local housing market. Industry insiders note that many homebuyers came from Ontario and purchased residential properties without even seeing the homes. But inventories were unable to keep up with the influx of demand.
According to the Nova Scotia Association of REALTORS® (NSAR), home sales tumbled 16.2 per cent in January year-over-year, totalling 704 units. But residential property transactions were 5.8 per cent above the five-year average.
Despite the drop in home sales, the average price of properties sold in January increased 23.2 per cent year-over-year, to a record high of $392,828.
Active residential listings declined 37.4 per cent, while new listings plunged 16.6 per cent. Months of inventory, which tracks the time it would take to exhaust the current supply at the present rate of sales activity, slid to start the year.
Prince Edward Island
The Prince Edward Island real estate market witnessed a four-per-cent increase in year-over-year sales in February, marking a high point for the month of February. The Prince Edward Island Real Estate Association noted that home sales were also 22.5 per cent above the five-year average. The average price of homes sold in February increased at an annualized rate of 8.5 per cent to $354,280.
New residential listings were up 28.4 per cent year-over-year, while active listings were up a modest 3.3 per cent year-over-year. Active listings were 29.3 per cent below the five-year average, and 59.1 per cent below the 10-year average. Months of inventory held steady year-over-year, at 2.8.
According to the New Brunswick Real Estate Association, residential property sales declined 6.3 per cent year-over-year in January, with 621 units exchanging hands. But home sales were still 4.8 per cent above the five-year average.
The MLS® Home Price Index (HPI), considered more accurate than average or median price measurements, swelled 32 per cent to $275,000 in January. Also, the benchmark price for single-family homes soared 32 per cent to $277,200.
New listings decreased 20.8 per cent, and active listings slumped 42 per cent. On a historical basis, new and active listings were 28.3 per cent and 59.6 per cent below the five-year average, respectively.
Can the Maritimes Sustain This Growth?
Many housing experts and public policymakers have debated if the Maritimes can sustain this growth and retain folks who have immigrated to the region. This was a once-in-a-lifetime opportunity for the eastern region, and many officials in places like Halifax have been proposing new economic developments.
The 2022 Canadian Housing Market Outlook Report from RE/MAX projected that many major Atlantic Canada real estate markets would experience notable price growth.
Here is a snapshot:
- Moncton: +20% to $332,734.80
- Halifax: +17% to $543,890.88
- Fredericton: +5% to $268,722.30
- Charlottetown: +8.5% to $409,207.75
- John’s: +5% to $338,114.70
- Saint John: +7.5% to $276,885.60
At the same time, housing affordability has become a ubiquitous discussion in the Maritimes. Prices are still below the national average, especially compared to many cities from which people are coming, such as Toronto and Ottawa. But ultra-low borrowing costs, limited inventories, and strong demand could exacerbate the affordability question.