Halifax rental market expert Kelvin Ndoro says a record number of new apartment units are going up, but not fast enough to accommodate the city’s seemingly insatiable demand.
New figures from the Canada Mortgage and Housing Corporation, where Ndoro is a senior analyst, show an increase in available apartments to rent. The vacancy rate has edged up to 1.9% from 1% a year ago, as COVID-19 puts a bit of a damper on demand.
That reprieve is likely to be short-lived, however. Once the pandemic is over, the demand from record numbers of new immigrants, international students, and people migrating from other parts of Canada will resume, putting pressure on the availability of rental apartments. And on monthly rents.
“The biggest issue is supply,” Ndoro says. “We need to get more supply and quicker.”
While the vacancy has eased up slightly in the latest CMHC report, rents have not. Average rents climbed 4.1% to $1,170 a month.
A record low inventory of homes for sale is likely helping support high rents.
Without the COVID-19 slowdown in demand from new immigrants and international students, Ndoro says the vacancy right would be tighter, likely closer to the 1% it was before the pandemic. While the vacancy rate has eased a little, immigrants and international students are still arriving, which is helping keep the market tight. In a balanced market, the rate would be around 4% to 5%.
The pandemic lull appears to be forcing some landlords with empty units to offer incentives, such as a free month or two of rent, as Halifax Magazine reported previously. Ndoro says CMHC’s latest report supports that notion, with available units commanding weaker rents than occupied apartments, except in the North and South ends.
To meet the growing demand, Halifax has a record 4,700 units under construction.
The CHMC is providing $8.7 million toward the construction of 52 new affordable housing units. With a particular focus on combatting homelessness, the plan, announced in December, is part of a $1-billion rapid housing initiative across the country.
“There are efforts being done to incentivize supply, but sometimes it comes down to a supply chain,” says Ndoro. “I’ve heard homebuilders say they have the demand, but they don’t have the people to work. We need to promote the trades to help developers build homes faster.”
By the numbers
- 1.9%: the current apartment vacancy rate in Halifax, up from 1%. Overall, Canada’s vacancy rate rose to 3.2% from 2%, as COVID-18 hit demand. Elsewhere in Atlantic Canada, St. John’s was at 7.5%, Charlottetown at 2.7% and Moncton at 2.8%, each with more availability than a year ago. Saint John remained stable at 3.1%.
- 4.1%: the average increase in rent to $1,170 a month
- 4.4%: average increase in rent in Dartmouth, the highest rate in the city
- 3.7%: the vacancy rate in the South End, an area heavily populated by university students
- 2.9%: the increase in the rental universe
- 55%: the drop in international immigration between January and June 2020
- 8%: the jump in migration to Nova Scotia from other provinces in the second quarter compared to a year earlier