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Despite the construction of thousands of new rental units in recent years, rents in Nova Scotia are still going up at a rate that’s several times higher than what was seen historically for decades.
From 1998 to 2018, the province’s rent inflation rate was never greater than two per cent, according to Statistics Canada data.
Today, while annual rent increases have now slowed from their peak of 14.6 per cent in October 2023, the latest figures show Nova Scotia rents still increased by an average of 8.7 per cent in July compared to the same month last year.
According to the Canada Mortgage and Housing Corporation, one reason this is happening is due to the location where new rentals are primarily being built.
“The rental story today isn’t just about Halifax anymore,” said Kelvin Ndoro, CMHC lead economist for the Atlantic region. He says population growth is becoming more dispersed across Nova Scotia.
“But housing supply growth remains heavily concentrated in Halifax,” Ndoro said. “So that mismatch can keep provincial rent pressures elevated.”
Ndoro would like to see more rental stock being built in other areas, citing Kentville, N.S., as an example where vacancy rates have been lower than in Halifax.
Another factor, says real estate consultant Neil Lovitt, is that many rental units likely have prices still below market rates because of the province’s five per cent cap on annual rent increases.
“So there is this sort of slower momentum to the way the market behaves here, because prices just take longer to adjust,” said Lovitt, a vice-president with the firm Turner Drake and Partners.
Since 2018, rent increases in Nova Scotia have outpaced the national average, going up about 57 per cent on average compared to about 39 per cent in Canada overall, according to consumer price index data.
While the new housing supply built in recent years has not decreased prices overall, Lovitt said it has made a difference.
“That supply has certainly had a positive impact in terms of blunting how bad things could have been otherwise,” he said.
According to Ndoro, Nova Scotia’s rental market is easing up, particularly in Halifax, with vacancy rates having improved.
That means potentially more tenants moving to new units, where there are typically much higher rent increases, as the rent cap only applies to lease renewals.
“So you can actually end up seeing rent growth remaining elevated … even as market conditions improve,” Ndoro said.
At the same time, when it comes to the most affordable units, he said vacancy rates are still very tight and “lower-cost rental options remain very scarce.”
Renters’ experiences with affordability have not improved overall, said Catherine Leviten-Reid, a Cape Breton University professor who researches affordable housing.
Leviten-Reid interviews low-income individuals and families as part of her research.
She said rent increases of three to five per cent, for example, represent a “huge increase for a low-income household” considering income assistance rates increased by less than two per cent this year.
That’s “less compared to the rental increase that they’re, you know, going to be asked to pay for from their landlord.”
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