As the local and national economies begin to take notice of the US economy's flactuations, local sentiment is starting to shift.  While consumer confidence levels remain higher than last year, the first quarter of 2008 has seen a declining pattern.  Respondents tend to believe they are better off now than they were six months ago, but fewer believe they will be better off in six months than they are now.  In spite of these changing sentiments the impact of recent wage growth will be positive for the Halifax housing market.

As the local and national economies begin to take notice of the US economy's flactuations, local sentiment is starting to shift.  While consumer confidence levels remain higher than last year, the first quarter of 2008 has seen a declining pattern.  Respondents tend to believe they are better off now than they were six months ago, but fewer believe they will be better off in six months than they are now.  In spite of these changing sentiments the impact of recent wage growth will be positive for the Halifax housing market.

Employment levels will continue to remain near or above record levels in the near term.  The unemployment rate reached a record low of 4.5 per cent midway through the first quarter but the rate is likely to stabilize near the five per cent mark over the forecast period.

The diversity of the local economy will continue to offer support and shelter during times of economic uncertainty. While certain parts of manufacturing sector are moving or shutting down operations in response to rising costs and the high dollar, other companies in the sector are growing or setting up shop in Halifax.  Employment figures indicate that the manufacturing sector currently is one of the fastest growing in Halifax.

Other sectors including retail, finance and technology-based companies continue to expand to Halifax offsetting most of the job losses in manufacturing and customer service centres.

Demand for commercial real estate is very high in Halifax with the vacancy rate dipping below five per cent, is indicative of the overall economic activity in the city.

The Port of Halifax has been challenged as China Shipping and Caterpillar Inc. announced decisions to no longer ship products in and out of the port.  However, engineering firms in the city have been benefiting from large aerospace and marine-based projects.  Overall the economy is fairly well-diversified and will continue to grow.

Recent wage growth and the various employment opportunites have made Halifax attractive and this has boosted migration.  Provincial migration improved in each of the last three quarters of 2007.  Over that time period net migration increased nearly 2007 across the province.

The average five-year residential mortgage lending rate increased nearly a full percentage point in 2007 from 5.9 per cent to 6.8 per cent over the course of the year.  Going forward, it is expected that the rate will be slightly in excess of seven per cent in 2008 and 2009.  In spite of higher posted rates, discounting remains very prevalent and continues to allow buyers to find closed, five-year mortgages below six per cent.  Borrowing rates in this range will continue to be supportive of the housing market in Halifax.

Recent census date indicates that single-person households and couples-without-children are the two fastes growing forms of households.  Smaller households mean more households even without any population growth.  Combining this propensity towards smaller households with rising wages and employment opportunities and the overall deman for housing will continue to remain strong.