Renting in Canada Never Gets Easier

For newcomers here or arriving soon, renting an apartment in Canada never gets easier. 

According to the latest monthly report from Rentals.ca (1), the average asking rent nationally in May for all property types was $2,202. That's up 9.3 percent from a year ago.

Nationally, asking rents in May rose 0.6 percent from the previous month.

In addition, CBC News just published a report (2) showing that, according to an analysis of over 1,000 neighbourhoods across Canada’s largest cities, less than one percent of rentals are vacant and affordable for the majority of Canadian renters.

Affordability a challenge for newcomers

These are just some of the accommodation challenges faced by immigrants and international students in Canada trying to figure out where they can afford to rent. 

As revealed by Rentals.ca, average rents across Canada are now up 32 percent from their pandemic lows.

Canadian rent prices have risen relentlessly in recent years.  From a low of $1,662 in April 2021. they are up $540 or 32 percent.  

 

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Meanwhile, Canada continues to pursue its ambitious immigration targets.

Canada welcomed another 34,785 permanent residents among its major categories in March, bringing the total for the year to 121,620 admissions. 

That's approximately 25 percent of the federal government's target of 485,000 permanent residents for 2024.

Also, in March,  there were 146,260 issuances across the government's major immigration streams. International Mobility Program issuances represented almost 60 percent of those issuances.

Hard to find an apartment to rent

Total issuances across major immigration streams were over 400,000 in 2024, which is 25.5 percent higher than at the same point in 2023.

Experts say this all adds pressure to the rental housing market and to newcomers looking for apartments. 

As noted in the Rentals.ca report, rents nationally have averaged an annual growth rate of 9.1 percent over the past three years. However, if you factor in the declines of 2020 and 2021, the five-year average growth rate is a more modest 4.7 percent.

According to the report, the average asking rent in Canada in May for a one-bedroom unit was $1,927, an increase of 10.7 percent from a year ago. Meanwhile, the average asking price for a two-bedroom unit was $2,334, a hike of 12.1 percent year-over-year. 

So, where can newcomers and international students afford to rent?

Toronto and Vancouver are the two popular Gateway cities for immigrants. However, a one-bedroom in Vancouver costs $2,671 a month, while a one-bedroom in Toronto costs $2,479. 

But if you compare that to a one-bedroom in Saskatoon at $1,258 or a one-bedroom in Fort McMurray at $1,422, it's obvious that newcomers can still find deals. Rent prices vary widely across Canada's mid-sized cities. 

That's why choosing the right city is also the best housing and jobs strategy for newcomers. 

Here are some key takeaways from the latest report: 

• The rental market will remain undersupplied but will have a more balanced growth.
• Markets such as Vancouver and Toronto are once again stabilizing near record highs. Asking rents for apartments in Vancouver and Toronto continued to fall year-over-year in May but less than in April.
• Provincially, rents rose the most in Saskatchewan (up 21.4 percent to $1,334), but Alberta and Nova Scotia were close behind.
• Rents in three provinces—Nova Scotia (up 17.1 percent to $2,238), Alberta (up 17.5 percent to $1,787), and Saskatchewan (up 21.4 percent to $1,334)—drove the majority of annual apartment rent inflation.
• Every province had annual increases in apartment rents for purpose-built and condo rentals in May
• Regina led rent price growth at the mid-city level, with an annual rise of 22 percent to $1,381.

• Edmonton led rent price growth among Canada’s largest cities, with a 14.6 percent annual increase in asking rents for apartments. Calgary increased twice that amount in the past year; however, the average asking rent is still lower in Edmonton ($1,507 vs. $2,089).
• Seven cities with the highest rent prices were in Ontario, and six were in the GTA.
• Twelve of the top 25 cities with the highest average asking rents for apartments in May are in the GTA.
• B.C. had three cities in the top 10 for rent prices.
• Windsor, Winnipeg and Edmonton still have two-bedroom apartments (popular with newcomers) for rent for under $1,600.
• St. John's, NL, had the lowest rent price among mid-sized cities. A one-bedroom on the island is $955, while a two-bedroom is $1,149.
• Burlington, recently rated the most livable city in Ontario, has expensive rent, slightly below the national average. Burlington ranks seventh among the most expensive one-bedroom rentals at $2,196.
• Condo rents fell 0.8 percent month-over-month to an average of $2,312.
• Purpose-built rental (apartment building) rents rose 1.0 percent on a monthly basis to an average of $2,146.

 

Roommate rent prices are highest in Vancouver

For newcomers to Canada and international students considering shared accommodation (aka being a roommate), the Rentals.ca report shows that asking rents rose 8.4 percent annually in four provinces to an average of $992 per month. 

Asking roommate rents were highest in B.C. at $1,191. Ontario was second at $1,069.

Roommate rents in popular cities with newcomers were Toronto ($1,257), Ottawa ($936), Calgary ($915) and Vancouver ($1,469).

Newcomers can become housemates

As an alternative to being a roommate, becoming a housemate (sharing accommodation) in a house with the landlord) is another rental strategy for newcomers to consider. According to Sparrow (3), a Canadian home-sharing platform supported by Accenture and CMHC, housemates pay less than roommates with more benefits. 

Sparrow, which matches potential housemates with homeowner hosts, says the average Sparrow room rental costs $875/month.

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So, what lies ahead for immigrants and international students hunting for that first home to rent in Canada?

Experts say that factors influencing Canada's rental market for the remainder of 2024 could include a slowing economy, a reduction in non-permanent residents, and improved homebuying activity for current renters fuelled by declining interest rates.

Renters have become increasingly more cautious and selective when making housing decisions - David Aizikov, Rentsync

Also, if the decline in rent price growth stops or rent prices start to rise dramatically and affect inflation, this could influence whether the Bank of Canada initiates any further cuts to interest rates. So that’s worth watching.

According to Rentsync's David Aizikov, as we head into the usually busier summer months for renting, this year "may very well have the slowest leasing activity in recent memory.",

Writing in Rentsync's National Demand Report, Aizikov says several factors have contributed to this trend:

• The rising cost of rent
• The growing cost of living,
• Economic uncertainty
• Feelings of instability by many Canadians.

"Renters have become increasingly more cautious and selective when making housing decisions," said Aizikov. "Many who choose to move are opting for more affordable options, while many more are opting to stay put to avoid facing higher rents and moving expenses."

None of this helps Canada's ongoing shortage of rental housing. Aizikov says this reduced turnover has the potential to accelerate rent growth as renters compete for a dwindling supply of available units.

Newcomers and international students should be prepared for rental challenges in the months ahead. 

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.

 

CITATIONS:

1 - Rentals.ca Report.

2 - CBC Rental Report. 

3 - Prepare for Canada and Rentals for Newcomers are affiliated with Sparrow.

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