If you're thinking about buying an investment property in Halifax, Nova Scotia, there's a question you should ask: Are small multi-unit buildings a good choice? With low vacancy rates and rising rents, it's a great time to look at the rental market in Halifax. This post is here to help first-time homebuyers, upsizers, Canadian military families relocating to CFB Halifax, empty nesters, and seniors looking to downsize.
The Problem: Low Vacancy and High Demand
Halifax's rental market is hot, and it's been that way for a while. Since the population surpassed 500,000 last year, rental demand has risen. Why? Because Halifax attracts newcomers, thanks to its growing economy, tech jobs, and government positions. But this means there's a problem: very low vacancy rates.
Low Vacancy Rates – Since 2021, vacancy rates have been around 1.0% and only climbed to 2.1% in 2024. They're forecasted to reach just 2.5% in 2025. This is still quite low compared to the national average.
Rising Rents – The average rent for apartments in Halifax is between $1,500 and $1,800 a month. And in 2024, rents on new lease units grew by 28%! For 2025, expect rents to increase by 3-5%.
Why This Matters for Different Buyers
First-time Home Buyers: You may be considering buying a rental property as a stepping stone. Low vacancy means consistent rental income if you invest in Halifax.
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sizers: Families looking to buy a larger home can consider holding onto their current home and renting it out. With strong demand, this could be an opportunity to build wealth.
- Military Relocations: Families relocating to CFB Halifax need rental homes. If you own the property, there’s a built-in demand from neighbours relocating for military service.
- Empty Nesters and Downsizers: Thinking of investing in your retirement years? Multi-unit properties can provide a steady income stream.
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## The Agitation: What Happens If Trends Continue?
What does low vacancy with rising rents mean in real life? Let’s look into the impact on different buyers and investors.
- First-time Home Buyers: Low vacancy means strong competition, and rising rents could be a challenge if you're also renting now. But owning a rental property can lead to extra income each month.
- Upsizers: Those wishing to move into bigger homes will face strong rental demand, making your current home an easy rent. It makes upsizing more affordable.
- Military Families: Relocating can be stressful. With many looking to rent, owning property here makes the transition smoother.
- Empty Nesters and Downsizers: Want to sell your large home and move to a smaller one? Buying a multi-unit property can offer rental income, meaning you get to keep cash flowing during your retirement.
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## The Solution: Strategies and Opportunities
Despite the busy market, investors can find great opportunities in Halifax. You just need a thoughtful approach. Here’s what to consider:
### 1. Look at Small Multi-Unit Buildings
Investors should consider duplexes, triplexes, and small apartment buildings. These properties:
- ✅ Provide multiple rental streams.
- ✅ Are in demand thanks to zoning changes allowing up to four units on lots.
- ✅ Can be found in hot neighbourhoods like North End, West End, and Downtown Dartmouth with near-zero vacancy and high rents.
### 2. Renovate and Re-Lease
By purchasing properties that need a little work, you can:
- ✅ Upgrade and reset rents to market rates, gaining significant rental yield.
- ✅ Take advantage of strong appreciation by improving property value.
### 3. Stay Updated on Financing
Good news for investors: mortgage rates in 2025 have stabilized. This improves the chance of getting favourable financing for:
- ✅ Rental property purchases.
- ✅ Renovations to existing properties.
### 4. Understand the Market’s Future
Keep an eye on Halifax's economic and population growth. Urban development and policies impact investment returns. For instance:
- ✅ Increased supply with new units being built is still not enough to meet demand.
- ✅ Short-term rental regulations, like registration limits, can affect your strategy.
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## Is Investing in Halifax Right for You?
For those thinking of buying rental properties, Halifax's market holds promise. There's high demand, favourable zoning, and potential for good rental income through small multi-unit buildings.
Here's what that means:
- ✅ First-time buyers and upsizers can benefit from rental income as they grow their portfolio.
- ✅ Military families can find investment properties to ease transitions.
- ✅ Downsizers and empty nesters can enjoy steady incomes by entering the rental market.
Remember, it's about knowing where and when to invest. Look for multi-unit properties in desirable neighborhoods and think about value-add projects that can boost returns. With the right planning, investing in Halifax can set up a promising future.
Whether you plan to buy your first rental property or add to your existing investments, consider how the Halifax market aligns with your goals. It's a strategic time to explore these opportunities, with the city's growth promising potential for those willing to invest.
Johnny Dulong - Family Real Estate Advisor
Call today .... EXIT tomorrow!
902.209.4761
Halifax Rental Martket - https://sellhalifaxrealestate.com/blog.html/-understanding-the-rental-market-when-buying-investment-property-in-ha-8879502
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