Halifax experienced historic rent increases, maintained 'very low' vacancy rate in 2023

Halifax experienced a historic increase in rental prices in 2023, according to the report.  (Adrian Wyld/The Canadian Press - image credit)
Halifax experienced a historic increase in rental prices in 2023, according to the report. (Adrian Wyld/The Canadian Press - image credit)

The average rent for a two-bedroom apartment in Halifax is up 11 per cent year over year — one of the highest spikes in Canada — while the city's vacancy rate remains one of the lowest.

The latest Canada Mortgage and Housing Corporation rental market report shows Halifax had a record number of housing construction completions in 2023, but also a record level of rent growth.

Kelvin Ndoro, CMHC's senior specialist and lead economist for the Atlantic region, said Halifax's average rent has had its largest jump since this data began being recorded in 1988.

"Rental demand continues to increase and supply is not increasing fast enough to keep up with that demand," Ndoro said Wednesday. "So, as a result, we are seeing a continued increase in rental prices due to that high demand."

There are currently 1,101 people considered "actively homeless" in Halifax, according to the Affordable Housing Association's by-name list, which counts people living on the streets, in shelters, hotel rooms and other precarious situations.

In December, CBC News reported there were 7,709 waiting for a spot in public housing across Nova Scotia.

'Very low' vacancy rate

The report, released Wednesday, examines changes to the rental market across Canada over the past year, showing Halifax as one of the cities in the biggest housing pinch.

The lowest vacancy rates of the cities examined in the report were in Vancouver and Quebec City, sitting at 0.9 per cent. Halifax's was next, remaining at a "very low" rate of one per cent for the third straight year.

Vacancy rates for the city's more inexpensive rental units between $850 and $945 were lowest, meaning low-income people have even less choice.

Ndoro said this shortage is partly because of record net migration to Halifax, mainly composed of non-permanent residents and immigrants who may be renters.

Many existing renter households also weren't able to transition to home ownership because of historically high home prices and mortgage rates — reflected in low sales over the year.

Increases highest for new tenants

The report found rents were significantly higher for new tenants than for existing tenants, which Ndoro said reflects "extraordinary increases in operating expenses" that are being passed on to new tenants who aren't covered by the province's temporary rent cap.

Tenant turnover rates were the lowest on record throughout 2023.

"So the prospect of higher rents at turnover has likely discouraged that tenant mobility within Halifax and as a result we've seen the lowest turnover rate of 10 per cent," Ndoro said.

He said government initiatives like tax rebates on new rental construction and greater investments in affordable housing will make a difference, it's hard to say when the effects will show.

"We are short quite a number of houses in the region, about 55,000 units short in Halifax for example," Ndoro said. "So we still have a long way to go."