As Newcomers Arrive in Record Numbers Rent Prices Continue to Climb

As newcomers continue to arrive in Canada in record numbers, rent prices nationally rose 10.5 percent over the last year, according to a new report from Rentals.ca and Urbanation.

That is the fastest annual growth since September 2023.

The average asking rent price in Canada rose to $2,193 in February. That's a 21 percent increase from February 2022, just before the Bank of Canada initiated its cycle of raising interest rates (now paused at 5 percent).

Shaun Hildebrand, President of Urbanation, called rent growth in Canada "unrelenting."

"While some markets are experiencing a softening in rents," Hildebrand said, "others are seeing an acceleration, with an underlying theme that rental supply remains grossly insufficient to meet current levels of demand."

Population growth sets records

New data from Statistics Canada shows that year over year, Canada’s population grew by 1,031,200 people.

Population growth in February and January 2024 made them the strongest back-to-back months for population growth in Canadian history.

The Canadian government remains on track to settle (or exceed) 485,000 newcomers in 2024 and 500,000 in 2025.

Asking rents for all residential property types in Canada averaged $2,193 in February. That's an increase of 10.5 percent year-over-year and represents the fastest annual growth rate since September 2023.

Rents in February decreased marginally by 0.1 percent compared to January.

Asking rents in February in Canada's major cities

Since February 2022, just before the start of the Bank of Canada's interest rate hikes, average asking rents in Canada have risen by 21 percent ($384 per month).

Canada announces help for renters

To address the challenge, Canadian Prime Minister Justin Trudeau announced on March 27 measures to help renters that will be part of next month’s 2024 budget. Some parts of the government's plan include a $15-million tenant protection fund and a Canadian renters’ bill of rights.

The Liberal's upcoming Renters Bill of Rights also includes:

Nationwide standards
History of apartment pricing
Legal aid fund to fight unfair rental practices
Rent payment history will impact credit score, helping renters to qualify for mortgage / lower rates

Speaking to Ian Bickus of Canadian Press, Andrew Graham, chief executive of Borrowell, called the government's plan regarding rent payment history "encouraging."

“We’ve been saying for a couple of years now, how important it is for consumers to be able to report rental payments to build up their credit history," said Graham, "so I was pleased to see the government taking some action.”

National Overview

Avg Rent by Prop Type and Unit Type March 2024_v2

According to the new Rentals.ca report, a 14.4 percent annual jump led to an increase in purpose-built rental apartments, which hit an average asking price of $2,110 in February.

Condo apartments had a 5 percent year-over-year increase in asking rents with a current asking price of $2,372.

In good news for newcomers and international students, Ontario and British Columbia, Canada's most popular and expensive provinces, had the slowest growth in asking rents for purpose-built and condo rental apartments over the past year ( 1 percent in Ontario and 1.3 percent in B.C.).

Asking rents fall in Vancouver and Toronto

In the two expensive "Gateway Cities," Toronto and Vancouver, which are extremely popular with immigrants, the average asking rents fell in February by 1.3 percent and 3.3 percent, respectively.

Alberta remains the province with the fastest-growing rents in the country. Prices for one-bedroom apartments rose 20.4 percent yearly, reaching an average asking price of $1,531.

Year-over-year, the asking price for a two-bedroom apartment jumped 18.8 percent year to an average of $1,886.

Edmonton, in particular, led Canadian cities in price growth. Rents saw an annual jump of 17.3 percent, with the current average asking price of $1,489.

49 percent of renters moved within the past three years and 26 percent within the last year alone.

Nationally, on a month-over-month basis, rent prices were down in many markets across Canada, falling 0.1 percent.

Burnaby, B.C., saw the biggest drop in asking rents for one-bedroom rentals, with prices falling 3.7 percent from January.

The price for a two-bedroom rental in Halifax fell 3.9 percent from the previous month.

Listings for shared accommodations rise

For newcomers and international students looking for shared accommodations, the number of listings jumped 72 percent in February compared to the same month in 2023.

The average asking rent for shared accommodations increased by 12 percent to $1,010 (with the greatest growth in B.C. ( up 13 percent) and Alberta ( up 12 percent).

Highlights from the Rentals.ca report include:

Canada’s largest and most expensive cities saw asking rents decline compared to a year ago. The average asking rent for purpose-built and condo apartments decreased by 3.3 percent annually in Vancouver and 1.3% annually in Toronto to $3,017 and $2,803, respectively.
For the second straight month, Edmonton was the leader in rent increases among Canada’s largest cities, posting an annual growth of 17.3 percent, reaching an average of $1,489 for purpose-built and condo apartments.
Calgary remained in second place with asking rents for apartments up 10.6 percent annually to $2,059, a slower increase than the 12.8 percent annual growth rate in January.
In Montreal, annual rent growth for apartments accelerated from 9.5 percent in January to 10.1 percent in February, raising asking rents to an average of $2,034 for purpose-built and condo apartments.

In March, Rentals.ca also released its first Canadian Renter Survey. Over 600 prospective renters were surveyed across Ontario, British Columbia and Alberta.

Here are some key takeaways:

34 percent of people have been looking for a place for at least two months, with 15 percent searching for more than six months.
49 percent of respondents had moved within the past three years, with 26 percent having moved within the last year alone.
69 percent highlighted the unaffordability of rentals in their region as their reason for moving.
63 percent emphasized price as their primary concern when searching for a new dwelling, while only 37% prioritized location.

"Hearing directly from renters is paramount in understanding the perception of the Canadian rental landscape," said David Aizikov, Senior Data Analyst at Rentals.ca. "These findings empower renters and landlords alike with the knowledge to make informed decisions, shaping a more dynamic and data-driven rental industry."

"With more and more renters simply choosing to remain in place, we are now seeing what happens when far too many renters have essentially been priced out of their home markets and can no longer afford to move," said Aizikov. "Whether it be price acceptance or unaffordability, renters in the most expensive and affluent markets (Ontario, B.C. and Alberta) are moving less, which is resulting in even tighter market conditions."

"With reduced turnover," said Aizikov, "whatever (rental) units remain on market will only be in greater demand."

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

*Rentals for Newcomers used no AI-generated content in the writing of this story, and all sources are cited and credited where possible.