Is a Good News Rental Trend Emerging in Canada?

A new report contains both good news and bad news for immigrants and international students grappling with rent prices in Canada.

According to the monthly report by Urbanation and Rentals.ca, the average asking rent for all home types in Canada was $2,188 last month. 

In April of 2021, rent prices in Canada hit their pandemic low of $1,662 nationally.  Since then, rents have soared 32 percent ($526 monthly).

 

 

According to the rental report:

• The average asking rent for a home in Canada in April was up 9.3 percent compared with a year ago,
• That annual growth rate increased from an 8.8 percent increase recorded the previous month.
• The average asking rent for a one-bedroom unit in Canada was $1,915 in April, up 11.6 percent from a year ago.
• The average asking price for a two-bedroom unit was $2,295. That's up 11 percent from April 2023.
• All provinces recorded month-over-month and year-over-year increases in asking rents (except for Ontario, where rents decreased 0.3 percent monthly and 0.7 percent annually to an average of $2,404).
• Asking rents for purpose-built rental (multifamily) apartments in April increased 13.1 percent compared with a year earlier to reach an average of $2,124. Condominium apartment rents averaged $2,331, up 3.8 percent.
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Now, that all seems bad, but for newcomers and international students looking to rent, there is also good rental news in the report, and perhaps a positive trend is developing: 

1. - Rents nationally were slightly down by 0.4 percent over the past three months.
2. - Asking rents were up a meagre 0.3 percent month-over-month.
3. - Apartment rents in Toronto have dropped 5.4 percent since their peak in November 2023, while Vancouver rents have fallen by 10.7 percent since reaching their high in July 2023.
4. - Despite the slight rent increase nationally in April, the overall trend shows a pause in the upward climb of rental costs.
5. - Vancouver's average asking rents continue to drop, falling 7.8 percent to $2,982 last month. Vancouver rents are still the highest among Canada’s largest cities, but the report shows they have dropped 10.7 percent since the peak in July 2023.
6. - Average rental prices in Toronto dropped 2.3 percent from April 2023 to $2,757. Rent prices in Toronto (which, along with Vancouver, are the two most popular cities with immigrants and international students) have now dropped 5.4 percent from November 2023.

Provincially, all Canadian provinces, except Ontario (see above), had month-over-month and year-over-year increases in asking rents.

Cheapest rents found out West

Saskatchewan, which features the bargain cities of Saskatoon and Regina, is the cheapest province in the country for rent. Rents in that province in April averaged $1,300. However, Saskatchewan passed Alberta as the provincial leader in annual rent growth, with an 18.4 percent increase. 

 

Alberta, which features the popular cities of Calgary, Edmonton and Lethbridge, recorded an average rent price of $1,746. That's an increase of 16.4 percent compared with prices in April 2023.

As for provinces in Atlantic Canada, Nova Scotia recorded the third highest rent growth, at 10.1 percent (featuring an average asking price of $2,169).

B.C. had the most expensive rents

British Columbia had the highest asking rents in April, with an average of $2,507 (up 1.6 percent from April 2023).

Manitoba’s 9.8 percent increase brought its rent price average to $1,609. And for those newcomers heading to Quebec, the average asking rent in that province increased 8.7 percent to $2,011 from a year ago. 

 

 

Meanwhile, Toronto’s rental market continues to soften from its November 2023 peak.

Urbanation president Shaun Hildebrand attributes this to a record number of condos completed in Toronto in recent months. Many of those condo units have been purchased by investors to be used as rental units.

Undoubtedly, newcomers who have just arrived or are in pre-arrival mode wonder whether this "trend," which indicates a slowing of rent price increases, is permanent or temporary.

The rent increases in April were minor, so this is certainly a better time for newcomers looking for an apartment than a year ago. 

As quoted by Victoria Gibson in the Toronto Star, Hildebrand says rents will soon begin to rise.

 Hilderbrand forecasts less new rental supply going on the market because builders and developers have faced demand challenges. He also says that historically, the summer rental market tends to be hotter and more competitive. 

“You’ll see rents begin to escalate,” he said.

Immigration continues to have an impact on the demand for rental housing. 

Canada will welcome at least 485,000 permanent residents this year and 500,000 in 2025.

The federal government plans to limit the number of temporary residents entering the country to five percent of the population over the next three years. The current percentage is 6.2 percent (2.5 million students, foreign workers, and asylum seekers).

It has also imposed a two-year cap on new international students and restricted eligibility for work permits for post-graduates and their spouses.

Summer rent searches will be slower

According to David Aizikov of Rentsync, while 2024 started strong, it  "has hit a bump with rental demand declining in April following a month of strong growth."

In Rentsync's National Demand Rental Report, Aizikov expects rental activity to be slower in the coming months. Also, this year's summer renting season will likely be depressed relative to the previous two years.

Aizikov also notes that renters have reduced their online activity, which indicates they are taking a more cautious approach to their rental searches. 

The apartment listing site Zumper also predicts that the Canadian rental market will be cooler than in 2023, citing interest rate cuts that will entice current renters who want to buy into the housing market and efforts by all levels of government to make it easier for builders and developers to create new housing as quickly as possible.

Experts say that slowing population growth and creating more rental housing will help slow rents even further going forward. 

Action Plan for Newcomers and International Students:

• Register for FREE for Rentals for Newcomers.

If you have a question, please email us at rentals@prepareforcanada.com

Steve Tustin is the 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.

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

© Rentals for Newcomers 2024