Halifax’s apartment vacancy rate rose above 2% in 2024 as rent growth slows

Halifax’s vacancy rate has recently exceeded one per cent for the first time in four years, reaching 2.1 per cent. However, this increase has not yet translated into more affordable rental housing options in the city. The latest report from the Canada Mortgage and Housing Corporation reveals that the average rent for a two-bedroom unit in Halifax in 2024 was $1,707 per month, marking a 3.8 per cent increase from the previous year. While this growth is less drastic than the 11 per cent spike reported last year, Halifax’s average rent still surpasses the national average of $1,447 for a two-bedroom apartment.

Despite the city’s vacancy rate aligning with urban centers across the country, finding affordable housing remains a challenge for many residents. Apartments priced below $1,300 face a vacancy rate of less than one per cent, with turnover remaining at a seven-year low. This scarcity results in intense competition for lower-priced units, making it difficult for existing tenants to find more affordable options.

The CMHC economist for the Halifax area, Lukas Jasmin-Tucci, notes that existing tenants are unable to move due to affordability constraints, contributing to the strong demand for lower-priced units. Additionally, rents for apartments available to new tenants have surged by approximately 28 per cent this year, despite the province’s temporary five per cent rent cap applying only to lease renewals for existing tenants.

Premier Tim Houston has emphasized the importance of increasing housing supply to address affordability issues. The CMHC report indicates that rental construction starts in Halifax are at a record high, but completion rates are limited by factors such as labor shortages. While supply is gradually increasing, demand has slightly decreased as international and interprovincial migration trends decline. Jasmin-Tucci suggests that the combination of rising supply and falling demand will eventually alleviate pressure on the market.

The rise in Halifax’s vacancy rate is primarily driven by vacancies in higher-end rental units, indicating a reduced demand for premium apartments. Landlords are struggling to fill these units, resorting to incentives like one rent-free month to attract tenants. Despite these trends, rents continue to outpace incomes, posing challenges for many individuals seeking affordable housing.

According to the Affordable Housing Association of Nova Scotia, 1,238 people in Halifax are currently in need of housing, including those living on the streets, in shelters, hotel rooms, and other precarious situations. Moreover, the Nova Scotia Provincial Housing Agency reports that 7,020 individuals are waiting for affordable public housing, with half being seniors.

In conclusion, while Halifax’s vacancy rate has increased, rental affordability remains a pressing issue in the city. The ongoing efforts to boost housing supply and address demand fluctuations are crucial steps towards making housing more accessible for residents.