A Renters Market Awaits Newcomers to Canada

For newcomers and international students arriving in Canada, rental demand and rent prices are dropping, making the market more competitive in favour of renters.

In October, rent prices in Canada fell 1.2 percent compared to the same month in 2023.

That's the first decline in annual rents since July 2021. The average cost of rent is down $50 a month from a record high in June 2024.

"We are transitioning into a renters market," said David Aizikov, product manager for Rentsync.

Rent prices fell in B.C. and Ontario

According to the latest national rent report from Rentals.ca and Urbanation, rent prices fell in large British Columbia and Ontario cities.

The average cost of rent nationally is now $2,152 per month. That's down $50 from June's record of $2,202 per month.

"It is a rare occurrence for rents to decline at the national level," said Urbanation president Shaun Hildebrand.

The last annual decline was in July 2021. At that time, the average cost of rent in Canada was $1,752 per month ($400 less per month than in October 2024).

According to the new Rentals.ca report, asking rent prices declined in October in Toronto, Montreal, Vancouver, and Calgary. Some landlords, especially in Toronto, which has an oversupply of rental condos, have cut rental prices.

However, rental prices in mid-sized markets, which are increasingly popular with immigrants, have risen as newcomers and Canadians continue to seek cheaper housing across the country.

Asking rents in Brampton fell slightly in October

Rents are expected to continue falling

Hildebrand sees the national downward trend continuing as more apartment construction is completed and population growth stabilizes.

"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," he said.

Canada has experienced "a very significant increase in rental construction over the last five or six years," Steve Pomeroy, an industry professor at McMaster University's Canadian Housing Evidence Collaborative, told CBC News.

The Bank of Canada lowered its interest rate three times to 4.25 percent in 2024. Another cut is expected in December, and more will happen in 2025.

These cuts have lowered mortgage rates and encouraged renters waiting for the cuts to enter the homebuying market, thus freeing up more rental units.

The latest provincial rental statistics from Rentals.cs's National Rent Report

Housing stats from October appear to show that the cuts motivate current renters to buy.

Canada is also encouraging the building of new rental housing, but this takes years and depends on financial conditions, including interest rates and inflation.

"What we're now seeing is the beginning of those units coming onto the market," said Pomeroy. "So that additional supply is helping to meet the demand."

New immigration targets will affect the rental market

The Canadian government capped international student permits and limited the number of temporary foreign workers allowed into Canada to help ease the rental crisis.

These revised policies around temporary foreign workers and international students appear to have eased pressure on rental housing demand.

Canada has also reduced permanent resident targets from 500,000 to 395,000 in 2025, down to 380,00 in 2026, and set a target of 365,000 in 2027.

All of this is expected to impact rental demand and prices going forward.

Canada's 15 most expensive rental markets, according to the latest Rentals.ca report

In October, declining rental asking prices happened mainly in B.C. and Ontario, Canada’s two most expensive provinces.

Rents fell 3.4 percent in British Columbia to an average of $2,549. In Ontario, rents fell 5.7 percent from October 2024 to an average of $2,350.

Saskatchewan had the most significant annual increase in apartment rents in October, at 17.1 percent, down from the 23.5 percent yearly rent price growth recorded in September. Apartment rents in Saskatchewan in October averaged $1,358, well below the national average.

Nova Scotia had the second-fastest asking rent price growth by province in October, up 9.6 percent from October 2023 to $2,298.

Annual rent increases in Alberta and Manitoba fell to 6 percent and 5.6 percent, respectively. Apartment asking prices averaged $1,786 in Alberta and $1,594 in Manitoba.

Canada's rental market has gotten more competitive as demand drops

Among Canada's largest cities:

Toronto had the most significant annual decline in asking rents for apartments in October, with rents in Canada's largest city down 9.2 percent from a year ago to an average of $2,642.
Vancouver was second, with an 8.4 percent year-over-year rent drop to an average of $2,945.
Calgary apartment rent asking prices fell 4.7 percent annually in October to an average of $1,995.
Montreal's average rents were down 2.9 percent from October 2024 to $1,987.
Ottawa apartment rents saw a slight 0.4 percent year-over-year hike to an average of $2,207.
Edmonton again led rent growth in Canada’s largest markets. Apartment rents increased 8.4 percent annually to an average of $1,584, but Edmonton remains the most affordable large city.

(Drone footage by Lvfree Adventures)

The average asking rent for apartments fell most significantly in Calgary (-5.5 percent) and Vancouver (-5.0 percent) compared to three months ago.

Despite experiencing the largest rent declines in October, B.C. and Ontario still have the country's most expensive mid-sized cities for average apartment rents.

North Vancouver ($3,141), Coquitlam ($3,011), Richmond ($2,794) and Burnaby ($2,763) topped B.C.'s most expensive mid-sized cities for rent prices.

Ontario's most expensive mid-sized cities for rent prices were Mississauga ($2,593), Oakville ($2,588), Markham ($2,581), Kanata ($2,568), Etobicoke ($2,566), and Richmond Hill ($2,548).

Canada’s rental landscape is characterized by fewer active renters who have become increasingly more selective in their housing decisions.
David Aizikov, Rentsync

In addition to the drop in rent prices, the demand for rentals in Canada is also falling.

Rentsync's Aizikov said that the growing supply of rental properties and the decrease in renters means that those looking for a rental "are in a stronger position when looking for new housing than they would have been anytime in the past two years."

Landlords and leasing professionals must learn to adapt to the more competitive rental landscape, said Aizikov.

Staying informed about Canada's housing situation can be crucial for newcomers to succeed. To stay on top of the trends, check out this article from our partner, @Prepare4Canada. Read more here: https://t.co/HBHsn5bS05
— Next Stop Canada (@NextStopCanada) September 5, 2024

"With fewer renters actively seeking new accommodations and an increasing number of availabilities,' he said, "standing out amidst the crowd will be crucial to maintaining strong leasing momentum and filling vacancies through the slower months."

"The vast majority of Canada’s rental landscape is characterized by fewer active renters who have become increasingly more selective in their housing decisions."

Other Rental Report Highlights:

Rent growth in Canada has been slowing since the summer. The decline in October is a steep change from the 9.3 percent annual increase in May.
Annual condo rent declines remained robust for studios (-6.9 percent to $1,874). Declines were also reported for one-bedroom condos (-3.3 percent to $2,057) and two-bedroom condos (-4.0 percent to $2,386).
Rare three-bedroom condos saw a 2.8 percent annual increase to an average of $2,889.
Saskatchewan continued to lead with a 17.1 percent annual increase in apartment rents in October, compared to the 23.5 percent annual growth recorded in September. Saskatchewan apartment rents averaged $1,358, significantly below the national average.
Apartment rents in B.C. fell the most for one-bedroom units, down 4.9 percent annually to an average of $2,254.

Rent decreases in the past 3 months in Vancouver have been significant

In Ontario, the largest annual drop in apartment rents was for two-bedroom units (a 6.9% decrease to an average of $2,583).
Six of the ten most affordable small and mid-sized cities in Canada for average apartment rents were located in Alberta - Lloydminster ($1,176), Fort McMurray ($1,308), Grande Prairie ($1,374), Medicine Hat ($1,396), Red Deer ($1,470), and Lethbridge ($1,489).
Sarnia, with an 8.9 percent annual increase. was the sole Ontario city among those with the fastest growing rents in Canada,
The only cities outside B.C. and Ontario to make the Rentals.ca top 25 were Halifax ($2,270) and Pointe-Claire ($2,269).
Shared accommodations grew in popularity and availability in October. The number of listings grew 12 percent month over month and 58 percent year over year.
Shared accommodation rents grew across most of the major cities. Edmonton posted 7.3 percent annual increase to an average of $791. Toronto had an 8.9 percent annual decrease to $1,196; Ottawa posted a 3.8 percent annual decrease to $930
.Vancouver was the most expensive city for shared accommodations with an average rent of $1,490, an increase of 2.4 pecent annually.

What's the long-term rental outlook for newcomers

As we approach the end of 2024, what kind of rental market are newcomers and international students facing heading into the new year?

Urbanation President Shaun Hildebrand says that as the supply of rental units increases, renters can expect a downward trend in rental prices to continue "in the near-term."

According to a new study by Desjardins, the rate of Canadian rental price hikes will slow as the government’s plan to cut back on immigration takes hold.

Other housing experts still predict that high demand will define Canada's rental market in the long term. Most experts agree that affordability will be the chief concern for newcomers and international students.

That demand, says the Canada Mortgage and Housing Corporation (CMHC), may mean higher rent prices and increased affordability issues in some markets.

Summary for Newcomers to Canada:

With inflation and interest rates falling, Canadian rent prices will likely continue falling in big cities like Vancouver and Toronto but rise in some mid-sized and smaller centres.

The affordability search will remain a key motivator for renters. Shelter costs are the No. 1 expense for most Canadians.

Whether you're looking to rent or buy in Canada, staying current about Canadian housing trends and being proactive is essential.

Pay attention to interest rates and inflation, as these impact housing.

Also, understand the regional differences regarding rental prices and rental demand in Canada so you can choose your new home wisely and make the right decision for your housing and career needs.

As rental supply struggles to meet demand, newcomers and international students must do their city research before they arrive in Canada.

Rental Action Plan for Newcomers:

Be sure to do your research BEFORE arriving in Canada.
Follow Rentals for Newcomers for the latest rental news and trends.
Investigate using a real estate agent to help you find a rental.
Look for landlords and property owners offering incentives.
Consider the benefits of becoming a housemate in a home-sharing program.

Sources:

Rentals.ca, Rentsync, Canadian Press, CBC

Steve Tustin is the Content Editor for Rentals for Newcomers and a contributing editor for Prepare for Canada. He is also the former managing editor of Storeys.com and a former senior editor at the Globe and Mail and the Toronto Star.

*No AI-generated content was used in the writing of this story, and all sources are cited and credited where possible.