Halifax's apartment vacancy rate rose above 2% in 2024 as rent growth slows
The Canada Mortgage and Housing Corporation's rental market report for 2024 was released Tuesday
Halifax's vacancy rate has climbed above one per cent for the first time in four years, but the new rate of 2.1 per cent has not yet helped make rental housing more affordable in the city.
The latest Canada Mortgage and Housing Corporation rental market report shows the average rent for a two-bedroom unit in Halifax in 2024 was $1,707 a month, up 3.8 per cent from 2023. This growth is significantly less steep than last year's reported spike of 11 per cent year over year.
Compared to urban centres in the rest of the country, Halifax's vacancy rate is about on par, but the city's average rent is higher than the national average of $1,447 for a two-bedroom apartment.
And for people looking for an affordable place to live, it's still a battle. The vacancy rate for apartments priced below $1,300 is well below one per cent and turnover remained at a seven-year low.
This means competition for lower-priced units is fierce.
"Existing tenants couldn't afford to move," said Lukas Jasmin-Tucci, a CMHC economist for the Halifax area. "It makes for a portion of the market where because people are staying and not moving, there's not a lot of change in tenants and the demand is still very strong there."
The CMHC also noted rents for apartments turned over to new tenants increased by approximately 28 per cent this year, despite the province's temporary five per cent rent cap, which only applies to lease renewals for existing tenants.
Jasmin-Tucci said these increases could be due to renovations and catching up to market rents.
"We do see an increase in the construction cost," he said. "So it's normal that especially in new units where tenants would move, we have higher rents because it costs more to build, it costs more to finance."
Record-high construction
Premier Tim Houston has often stressed that the key to making housing more affordable is building more housing, as his government highlighted in its five-year housing plan, released last year.
The CMHC said rental construction starts are at a record high, but it will take time before enough supply is added to actually improve the affordability of rental units. The report noted issues like labour shortages are limiting completion rates for new units in the city.
"When we look at the number of starts, which are very high, the number of completions are not as high," Jasmin-Tucci said. "So it's normal that when you build … a large apartment building, it takes a while from start to finish and the bigger it is, the longer it is."
Still, Jasmin-Tucci said supply is increasing and demand is down slightly as well, as international immigration and interprovincial migration are on a downward trend.
"Eventually, the combination of decreasing demand and increasing supply will ease the pressure on the market," he said.
Demand for premium apartments down
Jasmin-Tucci said the increase in the vacancy rate was driven by the higher end of the rental spectrum, meaning more expensive units are sitting empty.
The report shows demand for newly built premium apartments is down, with some landlords struggling to fill their units and resorting to "incentives such as one rent-free month."
Rents continued to increase faster than incomes, which is all too apparent for many people.
There are currently 1,238 people in need of housing in Halifax, according to the Affordable Housing Association of Nova Scotia's by-name list, which counts people living on the streets and in shelters, hotel rooms and other precarious situations.
In October, the Nova Scotia Provincial Housing Agency said there were 7,020 people waiting for affordable public housing, half of them seniors.
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With files from Tom Murphy
