Alternative lender Neighbourhood Holdings sees potential in Halifax, a city of just over 400,000, and according to its CEO, the city’s affordability mitigates risk.
“We’re big on diversifying our portfolio and we don’t just want to restrict ourselves to local centres we’re close to, primarily Vancouver and Toronto,” said Taylor Little. “Halifax always fits nicely in RBC’s Housing Affordability Measure; it takes roughly 32% of someone’s median income to own a house there, with Vancouver being at 85% and Toronto at 66%. As a lender, we like to go to areas where affordability is better because the best thing for us is to get repaid and people have an easier time repaying when they can afford to live in a place.”
In 2018 and this year, Halifax has seen an increase in housing sales, and price increases have been moderate at around 6%. The rental vacancy rate in the city is also below 2%.
“The challenge in the Halifax market is its rental sector is tight,” said Little. “There has been a lot of net migration to the province, which is another reason that, as a lender, we like it. It puts a lot of demand on housing.”
Many former Halifax residents priced out of expensive markets like Toronto’s are heading back to the city, as are job hunters.
“What you’re really seeing in Halifax is people returning home,” continued Little. “We see people leaving Alberta and heading back east, and people who are finding it hard to live in Toronto, because they can’t own a home, are moving back.”
Neighbourhood Holdings also anticipates Halifax will get a boost in housing demand, thanks to the First-Time Home Buyer Incentive, although by how much Little cannot say. Still, with their city’s affordable housing, Haligonians are ideal candidates for the program.
“The original plan [the federal Liberals updated the FTHBI last week contingent on winning the election], benefits markets like Halifax because it applied to housing under $450,000,” said Little. “We’re seeing a lot of first-time homebuyers in Halifax and that activity will certainly be aided by that incentive. I just don’t know to what degree.”