Affordability

In 2020, household income per capita grew by 7.2% for Halifax residents. This was largely due to government grants and subsidies provided for pandemic relief. At $50,147 per capita, Halifax no longer claimed the bottom spot across the 6 benchmark cities and had the second-largest growth in household income.

The price of consumer goods grew by 0.6% in 2020, the second smallest increase among benchmark cities. Purchasing power (per capita income growth minus inflation) increased in all cities, but residents of Halifax experienced the largest increase with a growth of 6.6%.

Statistics Canada publishes indexes of price differences for consumer goods and services across 15 major Canadian cities, including Halifax. The most recent data (2019) showed only one category had a substantial increase: recreation, education and reading. In contrast, there were downward trends for both the alcohol, tobacco and recreational cannabis category as well as health and personal care. Other categories kept pace with the metropolitan average.

A focus on headline-grabbing numbers like population, labour force, and GDP growth – especially when the news is good – may divert attention from other issues. Tracking measures related to the distribution of income and poverty are also critical to assessing our success as a city.

Looking at tax-return data, the Census Family Low Income Measure – After Tax (CFLIM-AT) calculates a national threshold dollar value to determine low-income situations. In 2018, the latest year for which data are available, 17.0% of Halifax’s population were in households with income below the CFLIM-AT threshold of $20,137. When broken into age groups, 20.9% of people under the age of 18, 17.2% between 18 - 64 years, and 11.9% of those 65 years and older were under the threshold.

Although CFLIM-AT provides valuable information, the Market Basket Measure (MBM) is used to determine Canada’s official poverty line. This measure is calculated using the cost of a particular basket of goods and services that represents a modest standard of living for a family of four. In 2019, Halifax’s MBM threshold was $46,147, the second highest across the benchmark cities.

Discussions around poverty alleviation often include the topic of income inequality. Comparing the total income shares of the top 5% and the bottom 50% in Halifax, a 20-year view shows generally stable patterns with some narrowing of the gap.

Affordable and high-quality child care are important not only for the development of children, but also for the broader economy as it can lead to increased labour participation and, in turn, higher incomes, reduced poverty, and a larger tax base. Because of the pandemic, however, there were decreases in child care enrolment across the country in 2020. According to a survey conducted by the Canadian Centre for Policy Alternatives (CCPA), Halifax saw a 23% decline in child care enrolment across all ages between February and November 2020. The largest drop in enrolment across benchmark cities was in Kitchener-Cambridge-Waterloo (-27%) while Quebec City saw less than a 5% drop in enrolment.

According to the CCPA, median monthly child care costs in Halifax for infants (<18 months), toddlers (18 months to 3 years), and preschoolers (>3 years) were $957, $853, and $868, respectively.

Halifax saw the largest annual growth in costs for both infants and toddlers across the benchmark cities, and the largest growth in fees for preschoolers occurred in Kitchener-Cambridge-Waterloo.

In a recent Statistics Canada survey, 17.3% of Nova Scotia parents with children ages 0 – 5 said they encountered difficulties finding child care in their community. Affordability (13.6%) and finding child care that fit work and study schedules (12.2%) were other leading issues. All these figures represent increases over 2019 responses. Additionally, the 2021 City Matters Survey carried out by MQO Research found that in Halifax 8% of individuals with children under 18 in the household faced major difficulties with child care. It may well be that school and daycare closures for most of the second half of the 2019-20 school year posed challenges for many parents.

At the onset of the pandemic, many experts feared that employment and income losses might lead to spiralling consumer debt loads and insolvencies. Fortunately, that has not been the case to date.

The average non-mortgage consumer debt in Halifax was $22,584 at the end of 2020, down 4.2% from the previous year. This was $615 above the provincial average, but still below the national average by $459.

Debt levels have been declining since 2017, but the drop at the start of 2020 was particularly large. Debt per consumer fell 2% (from Q4 2019 to Q1 2020) when COVID-19 struck, and then fell another 2% throughout the year. This decline in consumer debt could have multiple explanations such as people spending less during the recession or using government supports to pay off their existing debt.

Falling average debt per consumer has been accompanied by falling consumer debt delinquency rates. From Q4 2019 to Q4 2020, the delinquency rate in Halifax fell from 1.52% to 1.17%. This figure was lower than the Nova Scotia delinquency rate (1.37%) though higher than all of Canada (0.98%).

Consumer insolvencies²in Halifax have been steadily growing over the past decade, peaking at 2,081 in 2019. However, last year there was a sharp drop in insolvencies (-35%), reaching a new record low of 1,355. At face value this is good news, but less so if the drop in insolvencies was due to, say, business closures or temporary pauses in debt collection because of the extraordinary pandemic circumstances. If this is the case, insolvencies could potentially rise sharply in the near future.

Despite the abnormal market conditions and severe hits to employment and GDP growth, overall consumer debt metrics appear encouraging. However, the full story will not be known until debt deferral and income-support programs wind down.

New-home construction maintained a vigorous pace throughout 2020. Halifax registered 17% growth in single-unit housing with a total of 1,019 new units, surpassing the 10-year average by 275 units. Construction on multi-unit housing dropped by 41 units (-1.8%) in 2020; however, that is still 291 units above the 10-year average.

The type of units constructed continues to vary by region in Halifax. Starts of single-unit housing grew by 28% in rural parts of the municipality but fell by 8.6% and 28.6% in suburban areas and on the peninsula, respectively. In contrast, multi-unit-housing starts in suburban Halifax saw the largest growth in 7 years (61%), followed by peninsular Halifax (27%). Multi-unit starts fell by 71% in rural Halifax.

Average rent for a 2-bedroom apartment in Halifax rose 4.4% in 2020, to $1,255 per month (+$53 over 2019). After sharp declines over the past 5 years, the vacancy rate increased by 1 percentage point, the largest year-over-year growth in over a decade. This increase may be attributed to the significant decline in international migration and university student enrolment brought on unexpectedly by the pandemic.

Housing supply did not keep up with demand in 2020, and as a result, the average home resale price increased by 19.4% to just under $400,000, the largest jump among the 6 benchmark cities. The average price of a new single-detached house in Halifax was $506,047 in 2020 (+9.1%). Halifax was the third most affordable place to purchase a new single-detached home and the fourth most affordable for resale across the benchmark cities.