Nova Scotia sees busiest 1st quarter on record for housing starts

In the first three months of 2024, construction crews started work on more new housing units in Nova Scotia than during any oth‐ er first quarter since the province began tracking such data in 1948.

Between January and March, when construction is usually slower than spring and summer months, build‐ ing began on 2,158 new single family, semi-detached and row homes, and apart‐ ment units across the province, according to Canada's national housing agency.

During the same period last year, Nova Scotia only recorded 827 housing starts. The previous record for a first quarter dates back to 1973, which saw 1,369 hous‐ ing starts in the first three months.

Experts say the new record is a good sign, and could mean government in‐ centives and policy changes are working.

It comes as the province's population is increasing while housing vacancy rates remain around the lowest in the country, making in‐ creased residential construc‐ tion crucial to meeting de‐ mand.

"When we compare the new construction that's hap‐ pening in Nova Scotia to the rest of the country, we are way ahead," said Kelvin Ndoro, a senior analyst with the Canada Mortgage and Housing Corporation's market insights team.

"And I think that HST re‐ bate is quite a factor," he said, because the province "has kind of matched what the federal government is doing, but we haven't neces‐ sarily seen that in other provinces."

In September of last year, the Nova Scotia government announced it would be fol‐ lowing in the federal govern‐ ment's footsteps and remov‐ ing the provincial portion of HST from new multi-unit apartment building construc‐ tion projects.

Most of the housing starts in the province so far this year have been on multi-unit apartment buildings in the

Halifax area, Ndoro said, but Truro and Bridgewater are seeing an increase in con‐ struction as well.

"There's just a shift from single-family building just be‐ cause affordability right now is a big concern," he said. "We saw sales drop for single-family homes in the last two years. So some of that has shifted into rental housing."

Years in the making Duncan Williams, presi‐ dent and CEO of the Con‐ struction Association of Nova Scotia, said the growth in construction has been years in the making.

Williams said higher in‐ terest rates, labour shortages and supply chain issues are some of the biggest chal‐ lenges holding the industry back, but those are easing.

"It's a culmination of changes to our way that we train people, the recruitment efforts, we have changes in permitting processes, changes in terms of funding from government to help stimulate some of the hous‐ ing starts," Williams said.

Williams said he's seeing all levels of government working together to tackle the housing crisis for the first time.

"It's a little late to the game, but we're glad every‐ body's in the game," he said. "So it's going to take time for these things to really kick in‐ to high gear and take a full effect."

Further to go

Last fall, the province re‐ leased its long-anticipated housing plan, which used population modelling to predict that about 80,000 new units will be needed over the next 10 years to meet demand.

Ndoro said if this year's housing construction contin‐ ues at the same rate as the first quarter, work to build around 8,500 new units will begin this year.

"But when you look at the population numbers last year, there were 11,000 new households. So we're still ... falling short of where we need to be," he said.

Affordability is one of the biggest concerns when it comes to housing in Nova Scotia, Ndoro said, and even as new buildings go up, some affordable units are lost.

Williams said low supply is one factor influencing hous‐ ing affordability, but develop‐ ers are also facing higher production costs and are passing those on to renters or buyers.

"We have to look at the things that are easy to con‐ trol like HST," he said. "Ad‐ ministrative fees, the ease‐ ment fees, permitting fees, all those things. We could easily dial those percentages back and it would actually re‐ sult directly in the prices if we did it that way."

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