Canadian asking rents have substantially increased over the past two years, report suggests
The average asking rent for all residential property types in Canada grew by 8.6% annually in December to reach a new record-high of $2,178, according to the latest National Rent Report by Rentals.ca and Urbanation.
This built up on a 12.1% year-over-year upswing in 2022 and a 4.6% rise in 2021.
Over the past two years, Canadian asking rents have substantially increased by 22%, indicating an average monthly gain of $390, the report noted.
“The rate of rent growth in Canada was stronger than expected in 2023, mainly due to a surge in non-permanent residents, a resilient economy, and a sharp pullback in home buying activity,” said Shaun Hildebrand, president of Urbanation.
“While rents are expected to continue rising in 2024, there should be less upward pressure on the market this year as demand increases at a somewhat slower speed and more supply is added.”
Finance Minister Chystia Freeland is set to announce tax changes aimed at restricting the use of Airbnb and other short-term rental services in regions of Canada with existing restrictions.
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 21, 2023
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Which asset classes saw the greatest increases in rent?
The greatest gains were seen in the traditional purpose-built rental apartment sector, which posted a 12.8% increase to $2,076 in 2023.
Both condominium rentals and house rentals experienced more modest annual growth rates of 6.9% and 5.9%, respectively, with their average rents standing at $2,340 and $2,354 as of December.
One-bedroom apartment rents increased by 13% in 2023, reaching an average of $1,932. This was closely followed by gain in studio rents, with an 11.9% increase to an average of $1,552 in December. Two-bedroom apartments saw a 9.8% year over year increase, stabilizing at an average of $2,301, while three-bedroom rents rose by 9.9% to reach an average of $2,579.
In 2023, the province of Alberta registered the fastest-growing rents for purpose-built and condominium apartments, with a 15.6% annual surge to reach an average of $1,691. Still, British Columbia retained its position as the most expensive province for apartment rents, with an average of $2,500 despite a 1.4% annual decrease.
