Halifax's vacancy rate nearly doubled in 2020 but still tight: CMHC report
Increase due to significant drop in immigration, university enrolment
The average vacancy rate in Halifax increased in 2020 for the first time in five years, but experts say it's more indicative of the effects of the pandemic than any long-term solutions to the city's housing crisis.
The vacancy rate remains one of the lowest in the country. It's been steadily declining since 2015, hitting a record low of one per cent in 2019. It jumped to 1.9 per cent in 2020, according to the Canada Mortgage and Housing Corporation's 2020 report on rental markets.
"We're moving in the right direction … doubling, effectively, our vacancy rate is, in context, a pretty big move. But at the same time, [a] 1.9 vacancy rate is tight," said Neil Lovitt, a vice-president with Halifax real-estate consultant Turner Drake.
The increased vacancy rate is due in large part to a drop in international immigration rates and university enrolment, as well as the switch to online learning, the Jan. 28 report said.
Lovitt said the overall increase in vacancy rates is a bit of a reprieve, but agrees it's mostly because of the fallout from the pandemic.
"When we look at the longer term trends, it certainly doesn't point to a foolproof path back to housing affordability in the rental market," he said.
The report comes just days after a small rally was held in Halifax urging the city not to remove volunteer-built crisis shelters for people experiencing homelessness.
Average rent climbs 4%
Despite higher vacancy rates and less turnover, the average rent in the municipality jumped more than four per cent in 2020.
"The cost of building has gone up, the price of land has gone up, so what we really need is for more supply to come onto the market quickly enough and hopefully that'll bring prices down," said Kelvin Ndoro, a senior analyst with CMHC.
Ndoro said there is supply on the ground — Halifax has more than 4,700 units currently under construction, a record high. But it could be 24 months or more until they're completed.
"There is supply in the pipeline, but it's just not coming fast enough," he said.
The report also found vacancy rates were higher in units that were older and cheaper, likely due to their "inferior quality" and need for renovation or redevelopment.
Late last year, Nova Scotia introduced a retroactive rent cap that's in effect until the provincial state of emergency is lifted. It also bans so-called renovictions, where landlords evict tenants for the purpose of renovating their buildings.
Vacancy up across Canada
It's not just Halifax; rising vacancy rates are a trend across the country, as are increases in the average cost of rent.
The report included data for 22 rental markets, mostly major cities. All of them either had an increase in the vacancy rate or no change from the previous year.
Halifax's vacancy rate of 1.9 per cent was the second lowest in all 22 markets, trailing just behind Gatineau, Que., at 1.6 per cent.
With files from Tom Murphy