Halifax real estate market 'unbelievably hot', realtor says

Halifax’s housing market is roaring ahead as low inventory and strong demand push up prices.

The average price of detached bungalows in the city increased 7.3 per cent to $285,833 over the second quarter of last year, according to a Royal LePage house price survey released Tuesday.

In addition, the average price for standard two-storey homes was up 5.1 per cent to $317,167, and average condominium prices increased 5.1 per cent to $205,500.

“The housing market is unbelievably hot,” Matt Honsberger, a real estate broker with Royal LePage Atlantic, said in an interview Tuesday.

He said some houses in Halifax’s core are receiving multiple offers, pushing up prices and in some cases setting off bidding wars.

However, outside the urban core, Clayton Park and some areas of Bedford, Honsberger said the housing market has been steady.

While the uptick in prices coincides with the blockbuster shipbuilding announcement last fall, the major factor shaping the housing market in Halifax is inventory, he said.

Inventory levels are down roughly 10 per cent year-over-year, which has put upward pressure on average home prices and reduced the average number of days on market, Honsberger said.

The inventory in shortage could stick around, at least in some segments of the housing market, according to the latest data on housing starts released by the Canada Mortgage and Housing Corp. on Tuesday.

The federal housing agency recorded a decrease in new residential construction in Halifax last month compared to June 2011.

There were 157 housing starts recording in June compared to 202 last year.

“The decline in total starts in June is attributed to fewer multiple starts breaking ground,” said Matthew Gilmore, senior market analyst with the agency’s Atlantic business centre.

“In the single-detached segment, starts increased for the third consecutive month, climbing to 97 units from 92 last year.”

Although some observers expect a slowdown in housing sales due to a tightening of mortgage rules, Honsberger said these changes will likely have a minimal impact in Halifax.

“It will have some impact but not huge,” he said of changes that will see the maximum amortization shortened to 25 years from 30.

He added that the amount homeowners can borrow against their income has increased to 39 per cent from 32 per cent, which he expects will greatly offset the change in amortization length.

Honsberger also noted that low interest rates and strong employment levels continue to play a major role in Halifax’s market and will be a vital driving force for the remainder of the year.

(bbundale@herald.ca)

Source: http://thechronicleherald.ca/business/115703-halifax-real-estate-market-unbelievably-hot-realtor-says