Real Estate

Housing starts were the highest in history for the second consecutive year with 3,794 units, representing 16.8% annual growth for 2021. Completions also maintained pace with an annual growth rate of 6.3%, totalling 2,950 units.

Multi-unit starts dominated Halifax with a total of 2,859 units, up 28.0% over 2020. Apartments made up 2,568 of the total, the rest being semi-detached units and rowhouses. The peninsula led the way in multi-unit starts with a growth of 151.0% over 2020. In fact, 55.0% of all multi-unit starts were on the peninsula. Suburban and Rural Halifax accounted for 30.0% and 15.0% of the total, respectively. The reverse is true in terms of single-unit starts for which Rural Halifax was the hotspot. Of all single-unit starts in Halifax, 86.0% were in Rural Halifax. Overall, however, single-unit starts declined 8.0% in 2021.

The compound average growth rate (CAGR) of new-home prices in Halifax between 2001 and 2021 was 5.5%, and after annual growth of 10.2% in 2021, the average new home price reached a record high of $550,628. Despite the sharp increase, this remains more affordable than homes in benchmark cities like KCW¹and Victoria. Also, for the first time, the average resale price was more than the average price of a new home in Halifax by about $12,000. This is likely due to increased activity in 2021 in the resale market, and the quality and location of homes in the resale market.

Halifax’s recent population boom, even through the pandemic, has put great pressure on the rental market. In 2021, both the population and the city’s rental inventory grew by 2.1%. Furthermore, there were about 5,900 apartments under construction in Halifax as of January 2022.

Average rent in 2021 was the highest on record at $1,247 across all apartment types, an increase of 6.3% over 2020. The largest increase in rent was seen for 3-bedroom apartments (7.6%) and 1-bedrooms (6.7%).

Across regions within Halifax, although the peninsula has highest rents for bachelor, 1-, and 3-bedroom apartments, Rural Halifax has the highest rent for 2-bedroom apartments.

The vacancy rate in Halifax was 1.0% in 2021, tied for the lowest across benchmark cities. Within Halifax, Dartmouth East had the highest overall vacancy rate at 2.2% while the lowest was in Rural Halifax at 0.6%.

As discussed later in the debt subsection , non-mortgage delinquency rates were at historic lows (0.93%) by the end of 2021. Mortgage delinquency rates were even lower. Between 2016 and 2021, the average mortgage delinquency rate in Halifax declined 0.34 points to 0.20% -- the largest drop across benchmark cities.

This decline should be viewed in the specific context of 2021, however: interest rates remained at historically low levels and extraordinary income supports were available due to the pandemic. As well, mortgage forbearances (agreements between lenders and delinquent borrowers), credit repayment programs, and interest-deferral programs no doubt influenced the low delinquency rates.

Moreover, the average monthly repayment amount in Halifax was the second lowest among all benchmark cities at $1,188. The monthly average peaked in 2018 at $1,223. This lower amount could be a result of buyers in Halifax offering larger down payments, taking out shorter-term loans, or having higher credit scores. Mortgages make up 64.8% of all outstanding debt in Halifax. This is the lowest across benchmark cities and lower than the national figure.

The second-largest share of outstanding debt in Halifax was “all other credit.” Credit cards make up 5.4% of the total outstanding and 10.6% of the monthly payments due. Note, though, that some people use their credit cards to pay for most household expenses but fully pay off the bill each month, which would contribute to a higher monthly amount due but would not result in interest charges or increased debt beyond the current month.

Overall construction activity did not decline as many feared at the outset of the pandemic due in part to construction work being deemed an essential service. However, as 2021 rolled in with more contagious and severe mutations of COVID-19, investment in non-residential building construction declined (-12.1%). The aggregate decline is attributable to lower investment in commercial building construction ( -28.5%). Investment in industrial (+127.9%) and institutional and government buildings (+71.0%) grew.

Although investment levels declined in 2021, the value of building permits issued for work on non-residential buildings increased by 38.3%. In fact, the value of permits had been falling annually since 2018 (the earliest available data point). Almost all permits were issued for either new construction projects or improvements, with neither having a constant quarterly share.

However, in 2021, $24.1 million worth of permits, 7.3%, were issued for work unrelated to new construction or improvements, including conversions from non-residential to residential buildings.

Halifax’s overall office vacancy rate was 15.4% at the end of 2021, with the downtown and suburban rates at 20.3% and 12.0%, respectively. However, the average net rent has also been declining quarter over quarter, and Halifax ended 2021 with a net absorption²of 12,435 sq.ft., resulting in a lower vacancy rate over 2020. The industrial availability rate was 2.2% in Q4 of 2021, an all-time low, dropping 0.4 percentage points in just one quarter. Consequently, the average net rent for industrial space has reached an all-time high at $8.40 psf.