By Charlie Blore

The Atlantic market has fared relatively well throughout the recession. Through the first nine months of 2009, housing starts are down in the region by 15 per cent versus the same period last year. Of that, 18 per cent comes from single-detached homes and 10 per cent from other types. This compares favourably to the national average, which is down 39 per cent over the same span.
Delving deeper into the numbers, we see a wide disparity in performance throughout the region. Nova Scotia, the region’s largest market, has seen its starts decline 21 per cent between January and September 2009, versus the same stretch of 2008. New Brunswick, the second largest market, is down 20 per cent over that span. Newfoundland has fared somewhat better with a decline of just nine per cent. Prince Edward Island is the big winner, seeing the market actually rise 30 per cent over the same period.
According to Nova Scotia Home Builders’ Association president Andrew Holley, the end of August and month of September have represented a key turning point in that market.
“The market’s looking really good at the moment,” says Holley. “The new housing market has really picked up. New housing took a real beating here in the first half of the year. We’ll end the year off about 25 per cent from last year, but that’s not as disastrous as we thought it would be. It was looking pretty bleak there until a month ago, and then all of the sudden the market changed completely.”
A key reason for the turnaround in Nova Scotia has been the introduction of a new home buyer’s tax credit. Under the New Home Construction Rebate, Nova Scotians can receive a tax credit of up to $7,000 (or 50 per cent of the provincial share of the Harmonized Sales Tax) toward the construction of a new home. The program has already been a tremendous success, with more than 800 such credits having already been awarded, according to Holley.

Demographics and Resales Less Rosy
The resale market has struggled in Atlantic Canada. The Canadian Real Estate Association estimates resales to close the year lower in all four provinces; down 7.3 per cent in New Brunswick, 11.7 per cent in Nova Scotia, 0.9 per cent in PEI and 9.5 per cent in Newfoundland — this as compared to the national average of a 0.4 per cent decline.
Demographically, the story isn’t much better for the region. In September, the unemployment rate stood at 15.3 per cent in Newfoundland, 11.8 per cent in PEI, 9.5 per cent in Nova Scotia and 8.1 per cent in New Brunswick. This means three of four were well in excess of the national rate, which was 8.4 per cent.

Prince Edward Island Rejoins the Family
The news is positive on several fronts for PEI. Besides the strong starts figure, the province also saw the return of the Canadian Home Builders’ Association in May, with the founding of the board of directors for the new PEI HBA. The return of the CHBA to PEI is expected to help give the industry a voice in provincial matters, such as the adoption of the National Building Code and the looming battle over sales tax harmonization.
“We’re one of the two last provinces holding out on HST,” notes PEI HBA president, Scott Costain. “Now I think we’d better resolve ourselves to the fact it’s coming; if they were able to jam it down British Columbia and Ontario, little old PEI is not going to resist. But as an industry, now at least we can help direct what happens to us. And we’re working on that as an association.”