Big city rents fall for the first time in over three years
Rent prices in Canada’s major cities have dropped on an annual basis for the first time in over three years
October saw an annual 1.2% drop in national rental prices, a trend not seen since July 2021, according to a new report from Rentals.ca and real estate data firm Urbanation.
The national average rent is now $2,152 per month, down $50 from the record high of $2,202 seen in June.
"It is a rare occurrence for rents to decline at the national level," said Urbanation president Shaun Hildebrand in the report. "This is happening as the key drivers of rent growth in recent years – a strengthening economy, quickly rising population, and worsening homeownership affordability – are beginning to reverse."
The drop is concentrated in some of Canada’s largest cities, including Toronto, Vancouver, Montreal, and Calgary, where rental prices have been trending down. Meanwhile, smaller and mid-sized markets are still seeing rental increases as people move further out from expensive urban centres.
Canada’s rental market is seeing more supply come online as years of apartment construction efforts start to show results.
Steve Pomeroy, an industry professor at McMaster University’s Canadian Housing Evidence Collaborative, noted that Canada had experienced “a very significant increase in rental construction over the last five or six years.”
The Canada Mortgage and Housing Corporation (CMHC) reported in a recent fall housing supply study that many large cities are hitting record levels of apartment completions as developers clear backlogs, particularly in Montreal and Vancouver.
"What we're now seeing is the beginning of those units coming onto the market. So that additional supply is helping to meet the demand," Pomeroy told CBC News, adding that recent policy changes affecting temporary foreign workers and international students have reduced some of the demand pressures.
In markets with a high concentration of rental condos, like Toronto, some landlords have started lowering rents to fill vacant units.
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“[Prices have] already gone up to what the market can currently bear, there isn't much else to go," Pomeroy explained, describing the combination of factors now putting downward pressure on rents.
Tenant advocates are cautiously optimistic. Geordie Dent, executive director of the Federation of Metro Tenants' Associations in Toronto, acknowledged the downward trend but warned that affordability remains a challenge.
"The downward trend is great, but we've got a long way to go to get back to kind of some semblance of affordability or the standards that tenants used to enjoy," Dent said.
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