Halifax-based landlord Killam Apartment REIT recorded the “largest rental gains” in company history for when new tenants move into an apartment, according to its financial report for the quarter ending Sept. 30.
Killam owns 5,710 apartment units in Halifax and more than 18,000 across Canada.
“Rental increases achieved with new leases are strongest in Halifax, Saint John and Moncton,” said Killam executive vice-president Robert Richardson during the company’s third-quarter earnings call on Nov. 7.
Excluding the effects of buying and selling properties, the company reported an average monthly rent of $1,443 in Halifax as of Sept. 30. That’s an annual increase of 8.4 per cent and nearly double the increase reported last year.
Like other landlords, Killam boosts rents to the market rate when new tenants sign a lease, pushing the reported average rent increase above Nova Scotia’s five per cent cap. The cap only applies to lease renewals.
Killam’s financial results are an example of the overall trends we’ve been seeing in recent years in rental markets where there’s been inadequate housing supply, said Neil Lovitt, a vice-president with Turner Drake, a real estate consulting company.
“That creates an opportunity for for-profit housing providers to raise rents to market prices when they have an opportunity to do so,” Lovitt said. “They’re … doing what any market participant really can do.”
Neil Lovitt is vice-president of planning and economic intelligence with real estate consultancy Turner Drake & Partners Ltd. (Andrew Lam/CBC)
For its overall portfolio of apartments across Canada, Killam increased rents by 20.4 per cent when new tenants moved in between July and September. In Halifax, the increase was higher than that, according to a chart from its earnings call slideshow.
An analyst on the call asked Richardson whether the company has concerns about being able to achieve rent increases that match Nova Scotia’s rent cap on lease renewals, considering market changes like lower inflation.
“We feel quite confident that we can achieve it,” Richardson said.
Killam’s financial results show there’s a large need for public and other forms of non-market housing, where rents are kept lower, said Cape Breton University associate professor Catherine Leviten-Reid.
“Housing is a human right, and housing is a place we all deserve to … have in order to live our daily lives,” said Leviten-Reid, who researches affordable rental housing.
This chart from Killam’s 2024 third quarter earnings call slideshow compares rent increases on lease renewals and unit turnovers, across the regions the company operates. (Killam Apartment REIT)
Killam has previously told CBC News that it’s a provider of affordable housing in Halifax, and that the private market alone won’t address the housing crisis.
During the earnings call, executive vice-president Richardson said that Killam works to increase supply of apartments with long-term affordability commitments through programs with the Canada Mortgage and Housing Corporation.
“We remain cognizant of our responsibility to our communities by maintaining an affordable housing component in Killam’s mix of rental suites,” he said.
CEO Philip Fraser also said during the call that the majority of the company’s developments over the next two to three years will have “an affordability component.”
CBC News asked Killam for comment but has not received one.
The company reported a 10 per cent bump in net operating income — revenues made after subtracting the expenses of operating a building — compared to last year.
The company brought in $49.96 million over the first nine months of the year. Net operating income is not the same as profit because it excludes expenses like mortgage payments.
Although the rental market in Halifax largely remained the same in 2024, Lovitt said there were signs that things could change in the future. He pointed to a significant increase in housing construction starts this year in the city.
“It’s probably not going to mean anything really material for renters’ lives in the near term, but perhaps … the beginning of a change in direction.”
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