Atlantic Canadians hesitant to buy homes despite lower interest rates

CITYnews halifax / By Chris Halef

A new survey says Atlantic Canadians are taking a “wait and see” approach when it comes to potentially buying a home.

A new study from Royal LePage shows that even with a drop in interest rates and a bump in housing supply, renters in the region are still on the fence about making the jump to home ownership.

Roughly 45 per cent of those surveyed said they plan to purchase property in the future, with nine per cent saying they want to do so in the next two years.

The report notes that in part this is because of the rental market, which has seen a “noticeable shift” in the last few months.

“Vacancy rates are beginning to rise, and units are taking slightly longer to lease in comparison to the heavier competition seen in recent years. Landlords now need more runway to market their rental properties as tenants are able to be more selective,” Scott Moulton, sales representative, Royal LePage Atlantic in Halifax, Nova Scotia, said in the press release.

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He noted that in Halifax Regional Municipality rental demand is driven by students and young professions, who are choosing to rent rather than buy due to affordability issues.

Meanwhile, 16 per cent of renters say they considered purchasing a property before signing or renewing their current rental agreement.

The study by Royal LePage cites a rental report that says the price of a one-bedroom unit in Halifax increased 7.2 per cent year-over-year in May, a similar increase was seen for two-bedroom units.

When it comes to how much they spend on rent, 58 per cent surveyed said they spend more than 30 per cent of their net income on rental payments.

Despite these statistics painting an unaffordable picture, Moulton said prices are starting to stabilize.

“With more options available on the market, renters have more choices and can take their time finding a property that fits their needs,” he noted. “That said, many renters in urban centres like Halifax are willing to pay a premium to live in central areas near amenities, keeping demand and rental prices high in these neighbourhoods.” Newer purpose-built rentals with more modern amenities also come with a higher price tag, due to increased construction costs.”

Nationally, nearly one-third of renters plan to buy within the next two years, while 28 per cent said they were considering buying property before signing their current rental agreements.