Urban trend cuts vacancy levels

 

ROGER TAYLOR BUSINESS COLUMNIST
@CH-RogerTaylor
  

The Chronicle Herald – December 18, 2015 Edition

How does Alberta oil affect apartment rentals in Halifax?

The difficulties felt in the western oilfields lately has resulted in many Maritimers, who had moved to Alberta for work, returning home, said Guillaume Neault, principal market analyst with Canada Mortgage and Housing Corp. in Halifax.

The result is an overall decline in Nova Scotia’s vacancy rate, which was significantly affected by the 0.4 per cent vacancy decrease recorded in Halifax.

Halifax accounts for 85 per cent of all the apartments in Nova Scotia.

Statistics Canada’s Labour Force Survey has reported Halifax’s population, age 15 and over, grew to 349,800 as of October, which is about 4,900 more individuals, or a 1.4 per cent increase, compared with October 2014.

Neault said the population growth in Halifax stemmed from an increase in intra-provincial migrants and new Canadian immigrants that started in late 2014 and continued into this year.

CMHC’s recently released fall 2015 rental market survey, Neault said, shows a direct relationship between the lower vacancy rate in Halifax and the higher one in western provinces.

‟There has been positive netmigration numbers in the province of Nova Scotia for the past two quarters,” he said in an interview Thursday.

The study also shows how fast a response there is to economic weakness in some Canadian areas, said Neault.

In the spring, Halifax had a vacancy rate in the range of 4.1 to 4.3 per cent, and now the rate is 3.8 per cent.

‟So that tells us there is increased interest in the rental market, and probably younger households,” Neault said. ‟We see that young households seem to be choosing the rental market as their first option.” If Nova Scotia experiences economic gains over the next year or so, he predicted, there could be a direct impact on the homeownership side of the housing market as younger renters choose to own a home.

While not everyone moving to Halifax from the West is originally from the city, Halifax is gaining population due to another housing trend.

The trend is urbanization, and Halifax is attracting people primarily because it is the region’s largest urban centre, said Neault.

In general, a greater desire to live in cities has been trending across the country for several years.

The desire for urban living is leading to another tendency, which is to build in the downtown area, said Neault, which will likely be reflected in the rental market report in 2016 and 2017, but ‟will give an entirely new dynamic to the vacancy rate, and rents as well.” Landlords with apartments on the south end of Halifax peninsula have always been able to demand higher rents, he said. The growing demand on the peninsula has also meant north-end rents have been going up, too.

New to Halifax is an increase in the size of apartment buildings, said Neault.

Two downtown buildings now under construction are examples of what Neault is talking about.

The Maple on Hollis Street, being built by Southwest Properties, is billed by the company as ‟300 condo-style rental suites within a 21-storey tower.” At 22 storeys, the Alexander, on Lower Water Street, under construction by Killam Properties REIT, is promoted as featuring 240 apartments.

Two-bedroom condominium apartments in the ‟secondary market” rented for an average of $951 per month in October rather than $1,048 a month in the primary market, the Canadian Federation of Apartment Associations said in a news release.

Across different neighbourhoods in Halifax, average twobedroom rents in apartments range from $849 to $1,445 a month, with most neighbourhoods at less than $1,166.