Newcomers Will Find Rent Prices in Canada Appear to be Levelling Out

For immigrants and international students arriving in Canada, here's some good news: average rents had their most significant drop in 3 years and appear to be "levelling out."

According to the most recent National Rent Report from Rentals.ca and Urbanation, rent prices in Toronto and across Canada fell in June compared to May.

Rent prices in the popular "Gateway City" of Toronto for purpose-built and condominium rents dropped 2.5 percent from May to June for purpose-built and condominium rents.

That's a 22-month low. 

Nationally,  a 0.8 percent dip in rent prices was the largest monthly decline since early 2021.

Still, Canadian rent prices rose seven percent year over year to $2,185, marking the slowest annual rate of growth in 13 months. 

Rents in Toronto fell 3.5 percent from June of 2021 to an average of $2,715.

Shaun Hildebrand, President of Urbanation, says rent price increases are now happening specifically in more inexpensive Canadian cities, particularly in the Canadian prairie province. 

“Rents at the national level are clearly levelling out,” said Hildebrand, "while  larger markets dealing with severe affordability issues are seeing rents slow or fall.”

Key takeaways from the latest report: 

- Toronto apartment prices fell annually for the fifth straight month

- Month-over-month, only Ontario and Quebec saw apartment rent decreases.

- British Columbia saw flat growth.

- The Prairie provinces, however, saw rent price growth.

- Studio apartments nationally listed for an average of $1,993 in June.

- One-bedroom units nationally averaged $2,458; two-bedroom apartments $3,217 and three-bedroom units  $3,673.

- Asking rents for shared accommodations (roommate rents) fell 1.7 percent from June to July and four percent annually to a national average of $1,236.

- Saskatchewan topped all provinces with an annual rent growth of 22.1 percent (for purpose-built and condominium apartments). 

- Asking rents, however, are still 38 percent below the national average at $1,339. 

- Lloydminster, Alberta, remains Canada's fastest-growing rental market, with annual apartment rent growth of 29.6 percent in June. 

- In Grande Prairie, Alberta, rent prices rose 24.5 percent annually, Lethbridge prices jumped 14.7 percent, and Fort McMurray prices increased 9.5 percent.

- Toronto's asking rents for condos and purpose-built rental apartments dropped percent to a 22-month low of $2,715. 

Vancouver rents in the same category remain above $3,000 per month (rising 1.1 percent monthly but declining eight percent from June of 2023).

- Rents have declined annually in the last five months in Toronto and the past seven months in Vancouver.

-  Edmonton led apartment rent price growth among Canada’s six largest cities for a sixth consecutive month. Average asking rents jumped 14.3 percent to an average of $1,564 in June (Edmonton still sits near the bottom of the report's listings for 25 Canadian markets).

- Regina rents jumped 22 percent annually, Quebec City 19 percent, and Saskatoon 17 percent. The average asking rents in these three cities are between $1,371 and $1,640.

 

Rent growth has stalled overall in recent months in Canada. though some rental markets, such as Alberta,  continue to experience rental price growth.

Over the past few years, rents have continuously risen due to immigration, intense competition for units and a continuing lack of supply.

Vacancy rates in some cities remain at record lows, touching one percent. A three percent vacancy rate is considered healthy. 

Meanwhile, immigrants, international students and temporary foreign workers will continue to drive rental demand.

Canada is on target to welcome 485,000 permanent residents by 2024. The majority will come from India, China, the Philippines, and Nigeria. 

The country plans to attract another 500,000 permanent residents in 2025. Despite recent regulations aimed at limiting the number of international students and temporary foreign workers, significant numbers will also actively seek rental accommodation.

So, what does the rental landscape look like for newcomers going forward?

Rent prices were “effectively flat” between March and June, increasing just 0.2 percent nationally.

Despite continuing rent price increases in the Prairies and Atlantic Canada, rental prices appear set to stabilize in Canada, particularly in the country’s most expensive and popular rental markets.

Desjardins economist Randall Bartlett told Craig Lord of Global News that as renters are priced out of cities like popular megacities such as Toronto and Vancouver, the exodus towards “more affordable pastures” sends them to relatively affordable markets like Alberta, where rents soar as competition intensifies for units.

Bartlett predicts that the federal government’s plans to ease the flow of non-permanent residents into Canada and increase the available rental supply should ease the pressure on rents as we move deeper into 2024.

About one-third of Canadian households rent, as home ownership is viewed by many as a milestone and considered a path to setting oneself up financially for retirement. However, breaking into the housing market remains elusive for many Canadians. 

Rental Action Plan for Newcomers:

1. Follow the Canadian rental market monthly to pick the financially right city for you.
2. Register for Rentals for Newcomers (for free).
3. Investigate becoming a housemate.
4. Consider working with a real estate agent to find your first rental home.
5. Research how to impress a potential landlord.
6. Learn how to spot rental scams.
7. Learn how to find a short-term rental in Canada

CITATIONS:

1 - Rentals.ca Report.

2 - Rentsync National Demand Report

3 - Global News

.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.

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

© Rentals for Newcomers 2024