The overall pace of residential construction activity across metro Halifax is expected to ease slightly this year, before picking up again in 2009 to reach its highest level since 2004.  Despite the fact that softening demand for traditional single-detached homes is expected to continue, anticipated strong growth in multi-unit construction will keep the homebuilding sector busy over the next two years.

The decline in deman for singles can be attributed primarily to three things:  Changing demographics, rising costs and competition from the existing homes market.  From a demographic prespective, households are getting smaller which translates into less of a need for large, single-family homes.  According to 2006 Census data, the two fastest growing demographics in Nova Scotia are couples without children and one person households.  The rising cost of new construction is also a factor affecting demand for new single-detached hoems.  The average price for an absorbed single-detached unit in Halifax in 2007 was $332,821, which is an increase of almost 14 per cent compared to 2006.  Comparatively, the average resale price for an existing home in Metro Halifax was $215,645 in 2007, which was only a seven per cent increase compared to 2006.

The decline in deman for singles can be attributed primarily to three things:  Changing demographics, rising costs and competition from the existing homes market.  From a demographic prespective, households are getting smaller which translates into less of a need for large, single-family homes.  According to 2006 Census data, the two fastest growing demographics in Nova Scotia are couples without children and one person households.  The rising cost of new construction is also a factor affecting demand for new single-detached hoems.  The average price for an absorbed single-detached unit in Halifax in 2007 was $332,821, which is an increase of almost 14 per cent compared to 2006.  Comparatively, the average resale price for an existing home in Metro Halifax was $215,645 in 2007, which was only a seven per cent increase compared to 2006.

As such, the new homes market will continue to face stiff competition from the existign homes market as the lure of mature neighbourhoods and affordable prices continues to offer homebuyers an attractive alternative.  However, the upside risk to the single starts forecast, ironically, stems from the recent growth in the existing homes market.  Following a year of record sales in Metro Halifax, the inventory of existing homes may be getting thin, making the new homes market more desirable for new homeowners.  Single starts after the first quarter of 2008 are up 45 per cent compared to last year.

In the multi-residential construction market, there are a number of factors at play contributing to the increase in demand including changing demographics and increased homeownership costs.  A demographic shift to smaller households is considered the leading cause as the rate of household formation is outpacing population growth in Metro Halifax.  This trend is expected to continue into the foreseeable future as one and two person households are the fastest growing segment of the market.  Apartment or condo livign are attractive options for people for all ages.  Single people and young couples may opt to rent or buy a condo, either for affordability reasons or for lifestyle choice, as many multi-unit structures are convenienly located close to shopping and entertainment amenities.  Seniors and empty nesters enjoy the convenience of maintenance and care-free living that apartments or condos offer, in addition to being close to entertainment and health care services.

To read entire article go to www.chmc.ca - order desk and look for "Housing Market Outlook-Halifax CMA-Date Released: Spring 2008.