Rental rates in Halifax continue to rise, average asking price nearly doubles national increase

Those looking for a mortgage to buy a home got a bit of a break earlier this week when the Bank of Canada cut its key interest rate down by a slight margin.

But no such for renters as a new report from Rentals.ca and Urbanation shows that the average asking price on rents have hit an all-time high in the month of May and Nova Scotia is seeing higher than average price increases. 

According to the study, data gathered show the average rental asking price in Nova Scotia jumped by 17.1 per cent, year over year, nearly doubling the national average that increased by 9.3 percent

In Halifax, one bedroom apartments are seeing an average asking price sit around $1,925 dollars, that’s up 3.8 per cent while two bedrooms saw the biggest jump at 16.3 percent to $2,489.

What’s driving the inflation? Supply and demand says Rentals.ca spokesperson Giacomo Ladas, there’s not enough housing to match the need, causing inflated prices.

“People are not transitioning as they used to as fast from a rental to homeownership and when there’s no turnover there’s a lot less supply,” said Ladas. “And with not enough supply for the demand, then rental prices increase.”

In Halifax, the skyline is changing and there’s more residential construction happening than ever before but it’s still not enough to keep up said Halifax councillor Waye Mason.

The population across the Halifax Regional Municipality continues to climb, 20,000 people moved to the Halifax region last year, pushing the population to almost 500,000 people but despite the ramp up in work, the construction industry can’t keep up.

“The estimates vary but an average unit will house 2.1 people,” said Mason. “So we need between 20,000 and 30,000 units.”

The vacancy rate in Nova Scotia has sat at dangerously low at one percent for nearly four years and under two percent vacancy since 2017. But the commercial vacancy rate is much higher at 15 per cent and there are people who see opportunity to create more housing with that vacant office space.

Joe Nickerson is vice president and partner with Sidewalk R.E.D, a neighbourhood development company focused on creating new housing in Halifax and Dartmouth.

The Sidewalk group purchased the Centennial building at the corner of Hollis and Granville Streets, that is converting the 200,000 square foot office building in downtown Halifax into more that than 140 units of housing.

“It was almost 50 per cent vacant and kind of trending down that way and not a lot of extended lease terms on it,” said Nickerson.

The structure of the tower is sound but needed some upgrades said Nickerson who says the value the opportunity to rethink older buildings and also help address the housing crisis here.

“We were actively looking for an office building to convert,” said Nickerson, who along with his partners purchased the Centennial building in 2021.

Retro-fitting of the older office tower is a faster and greener way to create more housing says Nickerson but it’s not a one stop fix all to the housing crisis either.

“We saw the housing crisis forming,” said Nickerson but residential conversion of office spaces is only one approach and strategy to driving up housing stock.

“I think it’s going to take multiple prongs of attack to add material supply, that actually brings pricing down and gets the market back into balance,” said Nickerson.

Halifax council is looking at creating incentives for developers who convert office space into residential units.