Halifax Market Updates

Richard Payne

Daniel: Richard, how are you doing?

Richard: I'm good Daniel, how are you?

Daniel: I'm fine. We've talked many times before because I've known you for nine years and even the first time I met you. I detected a very interesting Spanish accent there. Where are you from Richard?

Richard: Keep guessing, cause not in it. The North of England.

Daniel: Manchester. We know the famous groups that came out of Liverpool whose famous ones came out of Manchester.

Richard: Manchester United, stone roses. There's all sorts that are famous in Manchester.

Daniel: When did you move to Canada?

Richard: We're just going to celebrate our 15th anniversary. It would have been 2007.

Daniel: Being the size of the country that we have, why alpha?

Richard: We looked at both coasts. We looked at BC as too rainy, too similar to the UK climate and not what we were looking for. We looked at Alberta way too cold, sorry, anybody from Alberta, but just can't handle that. Looked at everything in the middle, looked at Ontario, but that's where everybody went and we were looking for something a little bit like not as big as everybody wanted. I always like to go somewhere where other people don't go.

It took us a while, but we stumbled across Halifax, Nova Scotia, as soon as we came here. And just a little fact finding trip got off the plane. And when your wife says, yes, this feels right to you. Just go along with the flow because life is easy.

Daniel: Happy wife, happy life. Yes.

Daniel: You've been here 15 years? You've traveled, I'm sure. In many parts of the country, you still think Alvin part is a really cool place or Nova Scotia as a whole to live.

Richard: We really quickly decided, okay, this is now home for us. And yet, I left university and home when I was like 18. For me, I've always been a bit of a bouncing around, trying to find home. But as soon as you buy the house, you appreciate what you've got here. Kids are going to great schools, good friends, good neighbors. And just it was just instant, like in terms of where we landed. We just said, this is it. This feels home.

Daniel: I'm asking a lot of questions about that because Laurel and I love Nova Scotia. We were there three times in 2012 and 2013. I haven't been back since we are going to go, as soon as this COVID thing is over because we have more friends now than we had even when we were there the last time. But even though you don't work for the tourism industry I want you to take another minute to tell people what is. Amazing about how we fight that brings people to Halifax, Nova Scotia.

Richard: A lot of it is really that coastal living style. And they always say the east coast is very laid back, very friendly. I always take the laid back with a pinch of salt. We're laid back when it comes to the weekend. During the week, yeah, we work hard. There's kinda no stopping us. Especially entrepreneurial type people, we're constantly making sure that things are gonna get done.

I think it's just that way of life. Like we do have a big downtown core in Halifax, Peninsula. Dartmouth is very up and coming as well, but once you get outside of those core areas, It's really not that far to start getting on to a one acre plus property with space around you and the neighbors.
You've got trees that separate you half the time, you can't even see the main road that comes to the area. I think a lot of people are looking for that kind of a lifestyle. Yeah, for me, it's twenty-five minutes and I'm Downtown Halifax core. It's not far yet where I'm living. I think I'm just short of two acres of land and yeah, standing out my front deck, I see the lake across the other side of the road and peace is quiet yet, I'm 25 minutes.

Daniel: Your background is in management accounting, et cetera, all you're very meticulous. You're very particular with complex facts and numbers and stuff. And some time ago, I think eight years ago you became a realtor. What brought you to what attracted you to the profession?

Richard: A little bit of it was 22 years of being an accountant in the office. I'd already started investing in real estate myself and was struggling to find the time to go and look at real estate and analyze properties to actually carry on buying. And the rest of it was just, I needed a change. I'm like, yeah, I'm done. Like I need to complete enough to change my lifestyle. I absolutely got back.

Daniel: What I want to know, because I heard a very interesting story yesterday from my next guests James and Margaret Shinners, and Margaret told me yes about that crazy house. And I'm not going to give you any numbers and stuff, but basically it's gone from what I understand from a crazy market to an insane market. Tell us what's happening in Halifax, and let's start with that. What's happening in Halifax these days?

Richard: Crazy hot sellers? Like we'd love to make it a little bit easier on everybody, but it's just not what I should expect from an accountant, I'm always looking at the stats and seeing what's going on. Right now we have 268 homes in the whole of an area called HRM. Halifax Regional Municipality. That's around about 550,000 people. And basically not only Kovas Peninsula, Halifax and Dartmouth and Bedford, but push out to about half an hour and do it in a little semicircle. And that's what we call HRM.

And that's our key market in the whole of Nova Scotia. And yet you look at 268 homes. In February we sold 455 homes. We have 0.6 of a month of inventory for sale right now. And if we go back a year, let's go like one month pre COVID. We had 1089 homes for sale in February, 2018. And we sold only 360 homes in February, 2020.

Even then we only had three months of inventory, which is pretty good for the Halifax market. Now it's just nuts. I even started to go out. Let's be interesting here. And let's see how much above the asking price. The highest volume dollar value above asking price was $250,100 for a property in Hammonds Plains is how much over asking price it went. Now, a pinch of salt. Was it priced too low? Probably, but 17 offers $250,000 over asking price. Sales are absolutely in the driving seat.

Daniel: Let me ask you a question. Back in the summer of 2012, a really good friend of mine that I've known for 25 years, who was one of the negotiators for the government at the time for that big $2 billion contract of building ships and stuff like that. And so he calls me, he says, Hey, this is what's going to happen. Halifax is going to turn upside down. 5,000 people are going to move into the city or whatever, there's some stuff. So, that's why we went to Nova Scotia thinking, oh my God, we're going to buy some houses in the fall. And then actually bought seven houses over the next few months.

And then we're just going to wait here and see how much we're going to put in our pocket. And we bought a house in 2014 and we sold it five years later in Dartmouth for the exact same price that we had purchased it before. When did this craziness start and what's causing it?

Richard: You could go back to the status and you could see it really starting just a little bit of a hint of a change at the start of 2019, where it really kicked off though, was around about April, May, 2020. And that's when everything just blew up. A lot of it was COVID related. A lot of the people who are selling. We have two big times of our year when we sell a lot of listings. Come on in spring loaded listings, come on in the fall. Winter drops down a bit, summer drops down a bit because in summer everybody's want to spend some time with the kids and it's nice and warm.

Let's enjoy the winter. Let's not bother. COVID hitters at the start to the middle of March and literally kick the socks out of everybody who was about to put the houses up for sale. All of a sudden confused minds said, don't know what's going on with the economy. Don't know whether I can actually afford that or the house I wanted to buy. I don't know whether I'm still going to be in a job confused mindset, status quo.

Don't miss the house, do nothing. All the buyers though, when, okay. I only qualify for a certain amount of money on qualifying. Now we need to buy something quick before we get the rug pulled out from under us. Also, we can see mortgage rates are ridiculously cheap. Let's go for it. So, all the buyers really came out in the storm. All the sellers said no way, not doing it. We all will be all supply and demand. We took the supply out, we increased the demand, like it's on steroids and prices, therefore went up.

Daniel: Got it. You're having to offer where, for example, the seller will want to see, or the realtor of the seller would want to see an offer that is cleaned, possibly no inspection or approved financing, et cetera and fast closing.

Richard: Yes, and let's not forget for the most money possible.

Daniel: Of course, yes. Here's a question because remember where we are an investor club and a lot of people are on this call because they want to see what's happening because it is totally impossible to do cashflow here in Ottawa and a realtor friend of mine told me yesterday, she just sold a townhouse in Ottawa for $700,000. And the rent is about 1600.

Goodbye cashflow there. Is there anything at all anybody can buy in the HRM? Let me ask you a two part question in HR and can anybody buy anything and at least break even, or have a little cash flow. And part two, if not the HRM, is there anywhere else in the province where they can go in and still buy a house and make some cash flow?

Richard: First answer the question. Yes. Where inside of HRM, just stay away from peninsula Halifax, which is the bit that is like Northeast, South and West. The bit that sticks into the ocean, stay away from that because prices are just too expensive. Move off what we call peninsula. Start looking at the areas, like start looking at a place like Louis, Sackville, start looking into Fairview, start looking to spray fields, start looking into potentially north end Dartmouth and just start pushing out from where the nucleus of everything is.

The difficulty then is the nucleus is obviously where the majority of people want to rent and you're going to get the biggest. That's the trade-off, you push a little bit out and a lot of the people I know, and certainly me we're starting to go, let's start looking at what we would call secondary markets. Let's start looking at Elmdale and Fieldlens. Let's start looking at Truro. Let's look at New Glasgow. Let's go up to him, the Annapolis Valley, and let's start looking more towards Bridgewater, Lunenburg South Shore. In other words, let's get out of HRM and okay. We're now going an hour and a half drive, but the vacancy is still incredibly low now.

Yes. The rents are going to come down because we're a little bit further out. There's a bit of a trade off there in terms of price you pay versus rent. You're going to get, but it's not so much that you'd be like, yeah, that makes no sense. Now the other thing is, once you get outside of HRM you get the opportunity to start looking at bigger bills. You're now looking at 4, 6, 8, and 12. You're into bigger properties as well, because there's a bit more economies of scale and going for a bigger building when you go that far out.

Daniel: Are condos popular in the HRM? Or are condos being built and people buying them?

Richard: We've got a few conduit developments, especially around a place called Larry Uteck Boulevard in Bedford which is Halifax Dartmouth. And then Bedford are the three biggest population areas inside of HRM. And those are coming up deliberately, either built by the builder as apartment buildings. He's renting them out or they're being built as condos. And we all find him. Some people are buying those now to say, okay, it's either where I'm going to retire in 25 years.

In the meantime, I'll put somebody in there to rent break even. Let appreciation carry on and then I'll move into it. Or they're actually Downtown Peninsula. But again, Peninsula, Halifax, we're a condo. We're into like $500,000 for 800 square foot. One bed plus dang.

Daniel: Wow. Richard, I know from talking with you the last few weeks, you're very busy.

Richard: Yeah, always.

Daniel: That's where I'm going with this. You're always busy and here's what I'm thinking. There are only 230 houses for sale, and there's probably 3000 realtors in Halifax. Obviously, not all of them are busy, but you're busy because from what I know over the nine years. I've known you, you really are, and I can't use an F word, but people will figure it out. Good.

Richard: Yes, I think so.

Daniel: I think so too, which is why I wouldn't get to be on this episode here. And we're going to be probably at some point putting up your information because seriously folks, you want to go to Halifax and you want to go out Halifax and ask questions about there. Yeah, right there richard@richardpayne.ca that's pretty easy to remember.

Richard: I'll get back to Joel and start answering questions after we stopped talking.

Daniel: Thank you so much.