Housing in Halifax: Record high construction, low vacancy rates

Last Updated May 2, 2024 12:10:21 PM.

A new report on housing in Halifax shows the city is one of the fastest-growing areas but not without challenges.

The Canada Mortgage and Housing Corporation (CMHC) released data on 12 additional cities across Canada in its 2024 Housing Market Outlook.  

Earlier this year, the research organization released housing predictions for Canada's largest cities including Toronto, Vancouver and Ottawa.

Largely it painted a picture of increasing rents and costs associated with housing in the country. 

Halifax can expect home prices and sales to increase over the next two years due to population growth, the report says. This is mainly due to a rise in multi-uni rental construction.

"Rental apartment construction is hitting record highs month over month and this momentum is expected to continue," it reads.

However, the report notes, that the number of apartment buildings went ahead in 2023 due to financing prior to higher interest rates.

Population growth and "record low" vacancy rates are part of the reason why there is such a demand for new rental housing, the report says.

Based on this, CMHC predicts similar or higher numbers of multi-unit starts in 2024.

If interest rates decrease, construction is expected to "tick up." While this is "positive," the report notes some disadvantages.

"Trade labour shortages and potential increases in construction costs are two factors to consider," it reads. "This could cause some developers to rethink large ambitious projects they've been waiting to break ground on."

Single-detached units jumped by 10 per cent in the province's capital in 2023. This was the fastest growth among major cities in Canada, the report says.

The building costs and high land costs have impacted "record-high" new home prices, while the interest rates have limited buyers borrowing abilities, the report reads.

Despite this, in 2025 and 2026, CMHC believes there will be a gradual increase in single-detached homes due to the easing of interest rates and incomes rising.

The Halifax rental market will continue to be tight, as vacancy rates remain low over the next two years even with increases in rental apartments.

"A growing population and low affordability of homeownership will support rental demand," the report notes.

This population growth is "fulled" by younger adults, who usually are first-time home buyers.