If you thought 2019 was hard on renters, 2020 is going to be much worse! Halifax’s apartment rental vacancy rate has dropped to a new low of 1% — below that of Toronto, Montreal, and Vancouver. The Canadian Mortgage and Housing Corporation (CMHC) recently released its 2019 fall rental market survey which suggests that rent will become more expensive before it becomes affordable.
Last year’s vacancy rate, 1.6%, was lower than it had been since CMHC started tracking this data in the late 1980s. The plummeting vacancy rate has pushed average rent in Halifax up 3.8% to $1,113.
Here’s how it breaks down by unit type:
- Bachelor apartments are now renting for an average of $812, with a vacancy rate of 1.3%
- One bedrooms are renting for an average of $959, with a vacancy rate of 1%
- Two-bedrooms are renting for an average of $1,202, with a vacancy rate of 0.9%
- Three-bedrooms are renting for an average of $1,390, with a vacancy rate of 1.2%
With housing prices hitting a record high in 2019 (in Halifax), and housing inventory hitting a record low, plus tightened mortgage rules, many prospective buyers are putting off home ownership, leaving them with no other option, but to rent. So, they’ll rent and continue to pay inflated rents, thus, adding more fuel to the already heated rental market.
Beyond rising home prices, there are a variety of reasons why Halifax’s supply is getting crunched. CMHC’s report attributes the increased demand, as it has over the past few years, to demographics. Seniors are downsizing and moving into rentals, unemployment is down, and interprovincial migration and international migration are up. Population gains from international migrants in particular, has been a significant factor contributing to higher demand for rental apartments in recent years.
CMHC’s report says there are currently a record 4,000 units under construction in the city and there were more than 1,000 units completed last year, but the added supply isn’t meeting demand.
In my opinion, the fact that our vacancy rate is marginally lower than Vancouver’s is very concerning and also the scale of rent increases is even more concerning. If there ever was a time to purchase real estate in Halifax, it is now.
If you’re considering purchasing this year, but are struggling to save for the downpayment (due to increased lifting expenses), Nova Scotia has provincially funded programs that loans buyers an interest-free repayable loan of up to five per cent of the purchase price of a home. The Down Payment Assistance Program (https://housing.novascotia.ca/downpayment) assists Nova Scotians with modest incomes who pre-qualify for an insured mortgage to purchase their first home.
I work with some of the best mortgage specialists (and brokers) in the Province, so if you’re wondering where to start, I can help.
Source of data: CHMC & Halifax Star.