Halifax industrial and apartment vacancy rates continued to climb in 2024, according to a report from JLL.

The city’s apartment vacancy rate more than doubled from 1% to 2.1% amid strong rental-unit deliveries, while industrial vacancy rose 170 basis points from the previous year.

Despite higher vacancy, apartment rents continued to increase at a rate of about 4% year-over-year. However, with 10,000 units currently under construction and housing starts reaching a multi-decade high in 2024, rent growth could slow as supply expands. A decline in immigration levels may also contribute to downward pressure on housing costs in the medium term.

“Halifax is facing some of the same housing pressures that we’re seeing in Toronto, but on a smaller scale,” Scott Figler, the report’s lead author, told Connect.

Figler, JLL’s head of Canadian research, was referring to limited new supply. Halifax is gaining from strong demographic growth due to a population influx, he added.

But the growth subsided between 2023 and 2024.

“Their housing construction has been on an upward trend, so they’re dealing with [the supply shortage] pretty well,” said Figler.

On the industrial side, absorption remained positive, but the increase in vacancy was driven by nearly 300,000 square feet of new supply in Burnside, a district in the neighbouring city of Dartmouth, N.S., which comprises a large part of the Halifax region.

Much of the 300,000 sf was delivered vacant.

Average industrial asking rents rose in part due to newly delivered space being marketed at a premium compared to the market average. While a slower construction pipeline and higher vacancy could temper rent growth in the coming year, concerns are mounting over Halifax’s industrial land shortage, says JLL.

The company noted that a city report found only 46 acres of municipally owned land could be made available, far below the estimated 500 acres of industrial demand by 2040. This land scarcity is keeping valuations for existing assets and properties high, according to the company.

Pictured: Part of the Halifax waterfront.

Photo: First Class Holidays