Rent growth decelerates to lowest level in nearly three years
Canada’s rental market is finally seeing a break after nearly three years of surging rent prices, thanks to increased housing supply and a drop in demand.
Average asking rents for all residential properties across Canada rose by just 3.3% year over year in August , reaching $2,187 per month. This marked the slowest rent growth in almost three years, according to the latest National Rent Report from Rentals.ca and Urbanation.
On a month-to-month basis, rents dipped slightly by 0.1%, continuing a trend of moderation observed since May.
“Rent increases in Canada finally returned to their longer-term average after nearly three years of excessive growth,” said Urbanation president Shaun Hildebrand.
Hildebrand attributed the cooling of rent growth to more rental units coming on the market and a decrease in demand, partly due to policy changes affecting immigration and population growth.
For the last few years, Canada's rental market struggled with a lack of available housing, which pushed up prices, particularly in major urban centres. However, recent increases in construction activity and shifts in population dynamics are starting to relieve some of that pressure.
Roommate rents hit new highs
For those looking to share accommodations, the cost is also going up. Shared rental listings saw an 8% jump in rents, averaging $1,011 in August. Although shared accommodation costs dropped in Toronto and Vancouver, with rents falling to $1,234 and $1,481 respectively, other cities like Calgary, Ottawa, and Montreal saw increases.
The report also highlighted differences in how various types of rental properties are faring. Purpose-built rental apartments saw a 6.2% increase, with average rents rising to $2,118.
Condominium rentals, however, showed little movement, increasing by just 0.1% to an average of $2,308. Interestingly, while rents for studio condos fell for the sixth straight month—down 3.3% to $1,825—studio rents for purpose-built apartments rose by 10.7% to $1,784.
Regional trends
Despite the overall slowdown, certain regions still have notably high rents.
British Columbia and Ontario remain the most expensive provinces to rent in, but both saw declines. In BC, average apartment rents dropped by 5.2% year-over-year to $2,536, and in Ontario, they fell by 4.3% to $2,390. Saskatchewan, on the other hand, saw the largest rent increase, jumping 21.4% annually, with average apartment rents hitting $1,338.
Read next: Bank of Canada: Rent prices may drop, but don't expect home prices to fall
Among Canada’s major cities, only Edmonton experienced rent growth, with rents climbing 9.2% to an average of $1,579. Toronto, traditionally one of the country’s most expensive rental markets, saw the steepest decline, with rents falling 6.9% to $2,697.
Meanwhile, Vancouver, which had been on a nine-month streak of rent declines, saw its average rent inch back up to $3,116, still the highest in Canada.
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