N.B. sees largest one-year increase in average home prices compared to other provinces
Average home price climbed by 24.5%
Trends in the New Brunswick housing market are being compared to those seen in Ontario, with the one-year increase in home prices the highest among all Canadian provinces.
The Canadian Real Estate Association released statistics Monday showing that the average price of a home in New Brunswick has risen 24.5 per cent in the last year, going from $203,133 in October 2020 to $252,871 in October 2021.
Ontario, which saw the second-highest increase, saw a year-over-year percentage jump in its average home price of 22.9 per cent.
"Just very generally speaking, New Brunswick is up there with Ontario in terms of their price growth, and that's been true for quite some time now," said Shaun Cathcart, a senior economist with the Canadian Real Estate Association.
New Brunswick also saw its inventory of homes fall from 4.8 months of inventory in October 2020, to 2.6 in October 2021.
That figure, which is derived by dividing the number of homes for sale by the number of homes sold per month, was the lowest ever seen in New Brunswick, said Cathcart, adding that the province posted 14 months of inventory six years ago.
An influx of out-of-province buyers
The stats came as no surprise for Danielle Johnson, a real estate agent serving the Greater Moncton area.
"The stats totally and completely reflect what we've been feeling," said Johnson, who's been in the business for 16 years. "The real estate market has been on a trajectory that we've never seen before."
Johnson said the change has been driven, in her opinion, by an influx of out-of-province buyers — primarily from Ontario — selling their homes and purchasing in New Brunswick with no need to take out a mortgage.
Coupled with dwindling inventory, Johnson said, prices have gone up as prospective buyers submit blind bids in the hopes of being the one who seals the deal.
"We've definitely seen a surge in price, but that's all due to supply and demand," she said.
"If there are 25 people wanting the same home, of course they're going to put blind bids, and unfortunately they are competing against other out-of-province buyers, where they have the means to outbid each other based on the fact that they've sold really high in their market."
'Build, build, build,' association says
Cathcart said it's difficult to forecast what the real estate market will do next, but rising interest rates could cool things down.
At the same time, the anticipation of interest rate hikes could also be pushing people into buying now in order to lock in the current rate.
Regardless, Cathcart said, the current problem will need to be solved by increasing the number of homes on the market, noting that all the major political parties made increasing the housing supply a core part of their platforms in the last federal election.
"Our message has been, like, build, build, build," he said. "Keep building. Like, make it a national project."
"I'm not sure exactly how you do that, but it seems like if you want your kids to be able to afford a home, like the previous generations had or to be able to live in the neighborhood that they grew up in, you know, we might want to start building more housing because what's there now is, sort of, kind of occupied."