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 other 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, building began on 2,158 new single family, semi-detached and row homes, and apartment 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 housing starts in the first three months.

Experts say the new record is a good sign, and could mean government incentives 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 increased residential construction crucial to meeting demand.

“When we compare the new construction that’s happening 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 rebate is quite a factor,” he said, because the province “has kind of matched what the federal government is doing, but we haven’t necessarily seen that in other provinces.”

In September of last year, the Nova Scotia government announced it would be following in the federal government’s footsteps and removing the provincial portion of HST from new multi-unit apartment building construction 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 construction as well.

“There’s just a shift from single-family building just because 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, president and CEO of the Construction Association of Nova Scotia, said the growth in construction has been years in the making.

Williams said higher interest rates, labour shortages and supply chain issues are some of the biggest challenges 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 housing 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 everybody’s in the game,” he said. “So it’s going to take time for these things to really kick into high gear and take a full effect.”

Pressure builds to get more housing in Nova Scotia faster

Duncan Williams of the Construction Association of Nova Scotia welcomes federal funding for affordable rental units but says the industry is facing a labour shortage.

Last fall, the province released 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 continues 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 housing affordability, but developers 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 control like HST,” he said. “Administrative fees, the easement fees, permitting fees, all those things. We could easily dial those percentages back and it would actually result directly in the prices if we did it that way.”