The housing market in Halifax is cooling – but the rental market is heating up.

The Canada Mortgage and Housing Corporation reports demand for new and existing homes is dropping, but rental construction is booming.

Analyst Matthew Gilmore says rental construction is expected to increase 15 per cent this year after a 50 per cent increase in 2010.

Dale Noseworthy of Killam Properties tells Metro Halifax they’ve seen strong demand for rentals in HRM over the past few years – so strong that for the first time, they’re going to build their own apartment complex rather than buying and renovating an existing building.

Construction will begin in the next few months off the Bedford Highway.