A recent report in the Chronicle Herald newspaper in Halifax warned Atlantic Canada will have difficulty absorbing the next few interest rate hikes, but according to a senior mortgage adviser, the opposite is true.
Clinton Wilkins of the Centum-affiliated Clinton Wilkins Mortgage Team says that, while consumer debt is high—perhaps even alarmingly so—Atlantic Canadians carry less mortgage debt than the rest of the country. He added that January’s interest rate hike, even in tandem with B-20, had a negligible effect on Halifax’s housing market.
“People are still buying houses every day. People might be driven to houses they might not have normally wanted, but they also have allusions of grandeur sometimes. For us, we’re still doing deals every day.”
In fact, Wilkins believes Halifax is on the cusp of booming because incomes are high and the cost of housing is low. The trend began a couple of years ago and hasn’t abated—not even this year, as housing markets across the country cool.
“We’ve never had a boom here and there are other areas in the country where the real estate is so inflated or unaffordable, but people can come here and get a good-paying job in Halifax, but also homeownership is a reality,” he said. “People can own a freestanding house for $325,000—that’s very realistic. But guess what—you can even go a little bit outside the city and buy a semi-detached for $150,000, even $130,000. This is realistic. You can’t even buy a one-bedroom condo in downtown Toronto for $325,000—it’s just not available.”
Wilkins also believes that more immigrants will choose to settle in Halifax, Atlantic Canada’s lynchpin, and that even Canadians will start migrating there as well.
“I think we’re definitely going to see newcomers to Canada, but also positive relocation from places like Ontario, choose Halifax, especially as the job market strengthens,” he said. “It’s a different lifestyle on the East Coast. It’s a great place to live and a great place to do business. And I’m competing with the big boys; I’m doing 200 to 300 units on my own. Even the biggest brokers in Canada aren’t doing these kinds of units.”
Wilkins conceded, however, that rural Nova Scotia is heavily indebted and doesn’t have access to alternative financing sources.
“Outside Halifax in rural Nova Scotia, the debt-to-income is definitely higher. We are seeing more clients with credit issues and a harder time getting approved. Outside of Halifax, there are not as many options for conventional lending. Really, only the bank lenders are lending there. TD doesn’t even lend in rural areas unless they have a branch in a certain radius. We’re seeing more and more private lending in rural Nova Scotia, because if there are any credit issues there is not access to alternative lenders or monoline lenders.”