Real Estate Investing in Nova Scotia

Real Estate Investing in Nova Scotia

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Canadian real estate investment, like all investment ventures, requires a significant amount of homework and research before diving in. You want to feel confident that you have the information and qualifications that you need before you start sinking your hard-earned money into an investment, and real estate is no different. When looking into Canadian real estate, for example, you want to be certain that you have a handle on the differences between the provinces and territories.

Table of Contents - Real Estate Investing in Nova Scotia

Many investors might be tied to one particular province due to desire or family ties or other factors, but it’s still helpful to have a handle on any province’s particular challenges and opportunities. Things like demographics, income, tax rates and a host of other regulations can all help influence your decisions, so you want to be certain that you have a thorough understanding of these factors as you begin (or continue) your investing career. To help get you started, we are going to take you on a brief tour of Nova Scotia so that you can better understand its characteristics, markets and opportunities that exist for real estate investors.

New Scotland, new investment opportunities

Nova Scotia is the most populous of Canada’s three Maritime provinces and holds a fascinating position as a bridge between the old and the new. The province still relies heavily on traditional agriculture for much of its economic output and is the world’s largest exporter of berries, gypsum, lobster and even Christmas trees. Nova Scotia has long been a key supplier of these items and more, and its resource-based economy means that it can be at the mercy of swings in the commodities markets that other provinces might not be.

On the other hand, the province has also benefited from heavy investment from the Canadian government. The defence and aerospace sector is a big benefactor of the region, and roughly half a billion dollars in revenues results from investment. Additionally, hundreds of information technology companies have laid down roots in the area and have become a reliable employer for thousands of Nova Scotians.

Additionally, Nova Scotia is and remains a popular tourist destination for many. Its beautiful sights and national parks draw around 1.6 million per year, and its cultural sites and museums fascinate visitors from around the world every single year. Many of the cities and towns of Nova Scotia reap the rewards of this visitation, from large Halifax on down to many of the smaller communities. Even tiny Inverness, with just 1200 full-time residents, has benefited from a boom in tourism that originated with the development and construction of two premium golf courses, so real estate investment here has a lot of interesting opportunities that can be powered by several different developments.

All of this indicates that investing in Nova Scotia can cover several different opportunities. Real estate markets can vary across the province depending on the economic focus of a particular area, so it’s important to look into the different industries that have established themselves in a particular city or area of the land.

Key demographics of Nova Scotia

Nova Scotia is the seventh most populous province in Canada, which puts it right in the middle of the pack, but thanks to its small area it boasts the second-densest population concentration in the country. The province has been the benefactor most recently of interprovincial migration after losing out for years in this key marker for years—it has seen a significant uptick in recent years, which is surely a nod to the province’s changing economy. Recent economic changes in Nova Scotia have favoured more modernized industries like information technology, which can serve as a real draw for emigration, especially within a nation.

In keeping with its “New Scotland” name, the largest demographic in Nova Scotia (after those identifying simply as “Canadian”) is people of Scottish descent, who make up about 30% of the province’s entire population. Many Nova Scotians trace their heritage to other European nations, while many other residents trace their roots to Latin America, Asia and the First Nations of Canada.

The housing market in Nova Scotia, in particular, has benefited from an influx of immigrants to Canada in recent years. We’re proud to host these new Canadians, and their arrival in the Maritime provinces is a cause for celebration as they bring new skills and expertise to an area already rich with culture and diversity. This increase in population coupled with the relatively flat supply of homes has led to a market that favours sellers—buyers have to act quickly if they’re interested in a property, and typically need to be prepared to bid over asking if they hope to have a shot at landing the home that they have their eye on.

Income statistics of Nova Scotia

As was previously mentioned, Nova Scotia is transitioning into a more modern and technology-based economy but is still a largely a resource-based economy. As a result, the median family income (~$86,000) has traditionally been a bit below the national average (~$93,000), which could influence what types of properties you want to explore if looking into investing in Nova Scotia. However, an important caveat to this is that in Halifax, the province’s largest metropolitan area, that number rises to over the national average (roughly $99,000) in Halifax, befitting its status as a cultural hotbed and the site of much of the economic transition that has been previously discussed.

As a result of these discrepancies, real estate investors in Nova Scotia want to be sure that they carefully examine income statistics that are directly related to the area which they’re exploring. Income statistics that cover an entire province are not entirely useful, as they do not tell the entire picture. Income can swing throughout a province, so localized information is going to prove to be the most useful. This is usually accessible via census data and can be a powerful tool when you’re exploring where to invest and what you’d like to invest in.

Real estate prices in Nova Scotia

As with most of Canada, Nova Scotian real estate prices have been on a significant upswing over the past year or so. The Canadian market has been hot as a whole, with home prices rising at a rate of about 12.5 percent from March 2019 to March 2020. Nova Scotia has not quite hit these levels, but home prices have climbed at an appreciable rate of —9.6 percent over the same period. The average home price in Nova Scotia in March 2020 was around $288,000, a good jump over the previous March’s number of $263,000.

The rental market in Nova Scotia is a bit of a different proposition. Rentals are extremely popular in the province, as around 31 percent of Nova Scotians rent their living quarters. Only Nunavut (80 percent), Quebec (39 percent) and British Columbia (32 percent) can surpass this number of renters. To those of us interesting in investing in Nova Scotia, this represents a real opportunity. Buildings and properties that will be attractive to renters can find real pools of quality tenants in this province. Renting is extremely popular, so if you’re comfortable being a landlord and believe that you can find quality properties, then acquiring a property that can be rented out could be a good decision for you.

Rental prices in Nova Scotia have never been all that high compared to the rest of Canada—of the top 33 highest-priced rental markets in the entire country, only Halifax has a spot at number 22, with a one-bedroom going for around $1,200 and a two-bedroom apartment’s rent averaging just under $1,800. This has represented a real jump from a year before, especially with two-bedroom apartments, as inventory stays steady and population climbs in an increasingly popular area.

Canadian real estate has been hot for a while now until of course the spectre of COVID-19 put a damper on things. The coronavirus has changed every single aspect of Canadian life, and the real estate market is of course no different. The numbers of transactions have stagnated a bit in 2020, but many observers are predicting that this could be a temporary stall and could even presage a surge in sales and activity once economic restrictions are lifted when the worst of the pandemic is over.

Halifax market snapshot

Nova Scotia’s largest population center, by far, is the city of Halifax on the center of the province’s eastern coast. The city is a cultural and educational centrepiece for the entire province, and the county of Halifax is four times as large as Cape Breton, the second-largest county in the province. Halifax boasts some of the highest real estate prices in the entire province, with average home prices of around $353,000 (as of March 2020) being significantly higher than those of the province as a whole (roughly $288,000 at that same time). As discussed above, the rental market in Halifax is also the hottest (and most expensive) in the entire province, and one of the hottest rental markets in the entire country.

Halifax’s market is thus different from the rest of the province but can represent an opportunity for a Nova Scotia real estate investor looking to diversify their portfolio. A rental or purchase in Halifax can represent a fairly liquid asset—you can feel confident that prices will likely be on the uptick in both the short and the long-term, enabling you to be more aggressive in different areas that you might not previously have been. Investing in Nova Scotia can give you the chance to have some consistent rental sources in more agricultural regions of the province while making some real money in the cultural hub of Halifax.

As with most of Canada and as within most industries, Halifax real estate has felt the sting of the coronavirus pandemic. New listings are down around 15 percent over this same period in 2019, and showings are down by 70 percent. The real estate market in Halifax is partially on hold for now, but that’s completely expected as both buyers and sellers alike become more reluctant to interact with the property and the presence of strangers. Most experts believe that this is a temporary shift that will fade away once the virus and its worst effects begin to fade away. Patience will be key for those investing in Nova Scotia, as the province still has a positive outlook for the long-term when it comes to the real estate market.

Overall Nova Scotia market overview

To sum up, Nova Scotia’s real estate market provides a lot of opportunity for Canadian real estate investors. The Maritime provinces as a whole are heating up when it comes to real estate, buttressed primarily by population growth that can be attributed to both immigrants from outside Canada and interprovincial migration. Halifax is, of course, the population center and the hottest real estate market when it comes to both rentals and purchases, so there could be some real opportunities there for investors with a bit of capital backing them up. There is even a local real estate investors meetup group so you can compare notes with other investors.

Beyond Halifax, Cape Breton represents another compelling opportunity if you’re exploring real estate investing in Nova Scotia. Cape Breton is the second-largest population center in the province, and its market is comparably hot to Halifax’s as people with deep pockets arrive from abroad looking for a home in one of Canada’s most beautiful provinces.

Summary

Nova Scotia is one of the smaller provinces in Canada, but its density suggests a province that has community and urban culture, in addition to its mainstays of agricultural production and a reliance on the sea for a livelihood. The province has seen an economic retooling, with a focus on technology replacing or supplementing older extractive industries like mining or fishing. All of these point to a region where skilled and higher-paid workers are likely to continue to move, creating a real estate market that can command higher sale and rental prices. If you’re looking for a province that is beginning to take a step towards a financially sustainable future, then investing in Nova Scotia could be just the ticket for you.

Real Estate Investing Nova Scotia


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Scott Dillingham

Scott Dillingham

I have been investing and lending to real estate investors for nearly 10 years now. After thousands of successful deals between flips, rent to owns, student properties and commercial assets I have developed a deep knowledge of real estate investments and have a passion of sharing this information with the world! If your looking for a lender who specializes in rental property financing you're going to want to connect with me at team@lendcity.ca.