A relatively slow month of December capped off an interesting year for the housing market in the Halifax Regional Municipality (HRM).  The local economy remained stable in 2008 as employment reached record highs and unemployment reached record lows.  However, higher inflation, lower wage growth and economic uncertainty contrubuted to fewer MLS® sales and fewer starts last year compared to 2007.  Average price growth remained strong in the existing homes market.  In the new homes markets, a broader range of products actually brought the average new home price down from the 2007 level.

For the year, overall starts declined by 16 per cent to reach their lowest level since 1998.  The decline was due to a decrease in rental starts and condo starts.  These segments of the market recorded 25 and 51 per cent declines repectively.  A tight labour market coupled with economic uncertainty created delays in projects under construction and forced some developers to postpose future projects.  However, in a year that saw record levels of construction, there were 21 per cent more completions in 2008 compared to 2007.  As of December, there were 1,970 units under construction in HRM compared to 2,464 in December 2007.

Single-detached starts were flat in 2008 finishing the year with 1,177 starts compared to 1,169 in 2007.  After the first half of 2008, single starts in HRM were up by 21 per cent, however, they trended downward in the third and fourth quarters.  The downward trend in single starts was anticipated as the new homes market has been responding to some spill over demain from the existing homes market in HRM in the first half of 2008.  As demand was satisfied and tapered off, so did starts.

There were 18 per cent more new home sales in HRM in 2008 compared to 2007, however, there was also a great mix of new homes sold in HRM last year which contributed to the average price of new home decreasing to $329,765 compared to $332,821 in 2007.

The overall price decline in 2008 was significantly impacted by two submarkets in HRM.  All submarkets except for Dartmouth City and Halifax County East saw an average of five per cent price growth.  These two submarkets however saw new home prices fall 13.5 and 17.4 per cent respectively.

To view entire article go to www.chmc.ca look for "Housing Now-Halifax CMA-Date Released: January 2009".