N.S. home sales fell in 2023 with limited choice and stubbornly high prices, say industry experts

As Nova Scotia tries to build itself out of a housing shortage, local real estate agents say there still aren't enough homes on the market and new construction is priced too high for most buyers.

Data from the Nova Scotia Association of Realtors said 10,333 units were sold in the province in 2023, down 17.2 per cent from 2022. In December alone, home sales were 25 per cent below the five-year average for that month. 

The association also reported a modest price increase of 2.9 per cent on average prices of all housing categories combined. But demand was strong for the limited supply in the $200,000-$300,000 range. And single detached homes priced from $400,000-$500,000 sold faster than any other category in the last three months of 2023.

"So we see prices going up, but volume declining," said Chris Melnyk, a Realtor with Royal Lepage Atlantic.

"I don't necessarily see this ending because they're not going to create ... new developments with new processes tomorrow. It's likely going to take a while."

Melnyk said new homes need to be priced lower because many sit on the market for months after they're built.

"A lot of people just say 'We need more homes, we need more homes, there's a housing shortage'. But really there's a word that needs to be snuck in there — affordable housing shortage."

Melnyk makes YouTube videos often aimed at first-time home buyers and out-of-province buyers looking to learn about Nova Scotia. 

He said with interest rates at five per cent, the amount of money banks will pre-approve for a mortgage is less than in past years when interest rates were lower.

This means the most popular price range is still below $500,000, but that price is becoming harder to find in Halifax. And because of high construction costs, many new builds are listed above $700,000, which is unattainable for many buyers.

"Those are more like discretionary spending," he said. "It's like you don't need a $700,000 home, but you do need a place for your kids and your family to grow up in and that would be potentially like the $450[000]-$500,000 home."

Donna Harding, co-owner and broker at Engel & Völkers in Nova Scotia, said luxury home sales are also down, though prices are up. 

Engel & Völkers' 2023 year-end report showed sales of homes over $1-million in Halifax were down 16 per cent, but the average cost was up 13 per cent. 

"That's an inventory story really, and unfortunately that's the story that affects the whole country," Harding said. "But for Nova Scotia and for Halifax, I think it's going to affect us for a long time to come."