3 straight months of rent decreases could spell some relief for N.B. tenants
Some landlords being forced to lower asking price on vacant units, says representative
As more and more apartment buildings rise in cities across New Brunswick, data from Statistics Canada shows the rents being charged for the units appear to be falling.
Consumer price index data from the federal agency shows the cost of rent in New Brunswick has declined every month between last October and January, accounting for a 2.8 per cent decrease over that period.
Rents in January were still 6.7 per cent higher than they were a year earlier, however, the recent trend could indicate the overheated rental market is finally starting to cool.
"It may be surprising to see rents going down, and frankly for the first time in, you know, in several years," Richard Saillant, a New Brunswick economist, said.
"But fundamentally it's about supply and demand."
Rent prices in New Brunswick have seen a meteoric rise in recent years, climbing by about 34 per cent since 2020.
Those prices rose as the supply of new housing was slow to catch up with a sharp increase in inter-provincial and international migration into the province.
The result was borne out by New Brunswick's vacancy rate — a key indicator of supply — falling to a record low of 1.5 per cent in October 2023.
But now, with Ottawa tightening up on immigration and a wave of new houses and apartments being completed, those in the rental market appear to be in for a bit of reprieve.
"Overall, the pricing power of landlords is much lesser than it was before," Saillant said.
"We're starting to see for-rent [signs] popping up in communities and... that suggests that some units are either staying longer than before in the marketplace or becoming vacant, so it's good news overall for renters."
Slowing population growth
After decades of New Brunswick's population remaining relatively flat, the province saw a post-pandemic surge in people moving in from other provinces and other countries.
The population ballooned from 783,814 people in October 2020 to 857,381 last October.
However, that explosive growth has started to slow, with recent figures showing the province is now losing more people to other provinces than it's gaining.
More international migrants continue to move to New Brunswick, but the latest Statistics Canada estimates suggest that trend is slowing.
"Population numbers have had an effect on rent prices. So if population growth is slowing, we'll see this translated into rents," said Rebekah Howlett, an economist with Statistics Canada.
With the federal government's planned cuts to immigration targets this year and into 2027, population growth could reverse, slowing demand even further, Saillant said.
"So for 2025, I wouldn't be surprised to see rents at least stagnating, if not continue to decline," Saillant said.
Price cuts being made on some units, says landlords rep
The monthly decline in rent costs could be partly due to the late fall and winter being an unpopular time to move, Willy Scholten,president of the New Brunswick Apartment Owners Association, said.
At the same time, he said he has heard stories that back up the data.
He said some landlords have found that units in newer buildings aren't being rented as fast as anticipated, forcing them to budge on the asking price.
"So rental rates ... are not going up, and in some cases they're going down," Scholten said.
Risk of slowing supply growth
While the province's "housing crisis" isn't getting worse, it still isn't over, said Saillant.
Record population growth also triggered record housing construction, with 4,485 homes completed across the province last year, contributing to the province's vacancy rate inching up to two per cent last fall.
But with signs of slowing demand, Saillant said developers might pull back on the pace of construction.
Before that happens, the province should do more to encourage the construction of more housing, he said.
"There's an opportunity right now to make progress, particularly as left to its own devices, the private sector may not continue building to the same extent that it is currently doing so."
HST break will drive more construction, says minister
New Brunswick Premier Susan Holt won last fall's provincial election on a platform that included some housing-related initiatives, signature among them being a three per cent cap on annual rent increases.
Another of those was the removal of HST from the costs associated with building rental housing, a move that other provinces adopted earlier with some success.
Housing Minister David Hickey said he doesn't have concerns about the pace of construction slowing, adding he thinks any rent cost decreases are exclusively happening among higher-end units.
He said while demand might indeed be slowing, he's confident the HST break introduced last fall will be the push needed to maintain the pace of housing construction.
"We need to do a lot more to be making sure ... that that vacancy [rate] creeps up," Hickey said, noting he considers three per cent a healthy vacancy rate.
"And that means putting in the right incentives to get more developers off the sidelines and get more development going, so that we can become the most competitive development landscape in Atlantic Canada."
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