Increased supply in rental apartments will contribute to increased vacancy rates in 2008 and 2009. Demand for rental apartments will continue to be strong, but will be unable to keep up with supply in the short term. Expect vacancy rates to rise from 3.1 per cent to 3.5 per cent in 2008 stabilizing at around 3.4 per cent in 2009.
In Halifax, rental units remain relatively affordable and demographic factors remain supportive of the rental market. Demand for rental units remains high and as supply increases demand is expected to almost keep pace. Single-person households and two-person households are the fastest growing forms of housefold formation in Halifax. With higher numbers of smaller households the demand for smaller homes and apartments increases. Also, youth migration continues to be the single largest source of migrants to Halifax and 18 to 24 year olds have a much higher tendancy to rent.
Increased supply in rental apartments will contribute to increased vacancy rates in 2008 and 2009. Demand for rental apartments will continue to be strong, but will be unable to keep up with supply in the short term. Expect vacancy rates to rise from 3.1 per cent to 3.5 per cent in 2008 stabilizing at around 3.4 per cent in 2009.In Halifax, rental units remain relatively affordable and demographic factors remain supportive of the rental market. Demand for rental units remains high and as supply increases demand is expected to almost keep pace. Single-person households and two-person households are the fastest growing forms of housefold formation in Halifax. With higher numbers of smaller households the demand for smaller homes and apartments increases. Also, youth migration continues to be the single largest source of migrants to Halifax and 18 to 24 year olds have a much higher tendancy to rent.
The recent strength in employment and wage growth has also been supportive of household formation and demand for rental units. Even a downward turn in the economy should keep demand for rental units high as rental units compete very well against the rising cost of condos and single-family homes,
In 2008, the average rent for a two bedroom apartment in Halifax will average approximately $840, which is a three per cent increase over 2007. Rents in new and higher end buildings continue to rise at at faster pace, however, with the vacancy rate inching upwards, overall rent increases will be kept to a minimum as landlords look to attract new tenants and retain the ones they have, despite the need to increase rents due to rising costs.
To read entire article visit www.cmhc.ca go to the order desk and look for "Housing Market Outlook-Halifax CMA-Date released: Spring 2008."