Asking rents for all residential property types in Canada increased by nine per cent in 2023 according to Rentals.ca and Urbanation’s latest National Rent Report.
The average asking rent reached a record high of $2,178 in December 2023, showcasing an 8.6 per cent increase from the same period in 2022.
Over the past two years, asking rents in Canada saw a 22 per cent increase, representing an average monthly increase of $390.
The 8.6 per cent year-over-year increase in 2023 follows a 12.1 per cent increase in 2022 and a 4.6 per cent rise in 2021.
“The rate of rent growth in Canada was stronger than expected in 2023, mainly due to a surge in non-permanent residents, a resilient economy, and a sharp pullback in home buying activity,” said Shaun Hildebrand, president of Urbanation in a press release.
“While rents are expected to continue rising in 2024, there should be less upward pressure on the market this year as demand increases at a somewhat slower speed and more supply is added.
”Traditional purpose-built rental apartments reached an average asking rent of $2,076, and experienced the fastest growth in 2023, posting a 12.8 per cent increase. In contrast, condominium rentals and house rentals saw relatively slower annual growth rates of 6.9 per cent and 5.9 per cent, respectively, with average rents of $2,340 and $2,354 as of December."
Alberta had the fastest-growing rents for purpose-built and condominium apartments in 2023, recording a 15.6 per cent annual increase to reach an average of $1,691. British Columbia maintained its position as the most expensive province for apartment rents, averaging $2,500 in December despite a 1.4 per cent year-over-year decrease.
Ontario recorded a 3.7 per cent annual increase, with average apartment rents slightly below B.C. at $2,446.
Quebec experienced faster rent growth for apartments in 2023 compared to 2022, with average rents rising 10.0 per cent to $1,953 in December.
Among Canada’s largest cities, Calgary posted the fastest annual rent growth for apartments in December, with rents rising by 14.0 per cent from a year ago to an average of $2,071.
Edmonton followed with a 13.5 per cent annual rent growth, reaching an average of $1,467. Montreal secured the third spot in 2023 with an 11.3 per cent annual rent growth, pushing average apartment rents up to $2,019. After posting annual rent increases of more than 20 per cent in 2022, Vancouver and Toronto experienced a considerable slowdown in rent growth in 2023.
Vancouver's average asking rents decreased by 0.7 per cent annually to $3,059, while Toronto's asking rents for apartments increased by just 2.1 per cent from a year ago to an average of $2,832.
As we enter 2024, the rental market in Canada will remain undersupplied but is anticipated to exhibit a somewhat more balanced trajectory. Rent growth is projected to converge towards the five-year average increase of approximately five per cent. Anticipated factors influencing the rental market in 2024 include a slowing economy, a reduction in the number of non-permanent residents, and an improvement in homebuying activity fuelled by declining interest rates.
Guelph finished 9th out of 35 cities in the month of December. The average one-bedroom rent was $2,078, which was a 2.1 per cent increase month-over-month, and 1.4 per cent increase year-over-year, while the average two-bedroom rent was $2,361, which was a -2.1 per cent decrease month-over-month, and a 1.8 per cent increase year-over-year.
Kitchener finished 13th out of 35 cities in the month of December. The average one-bedroom rent was $1,927, which was a 1.3% increase month-over-month, and -2.1 per cent decrease year-over-year, while the average two-bedroom rent was $2,359, which was a -1.9 per cent decrease month-over-month, and a -3.6 per cent decrease year-over-year.
London finished 16th out of 35 cities in the month of December. The average one-bedroom rent was $1,854, which was a -0.9 per cent decrease month-over-month, and 2.6% increase year-over-year, while the average two-bedroom rent was $2,253, which was a -1.2 per cent decrease month-over-month, and a 4.6 per cent increase year-over-year.
Hamilton finished 18th out of 35 cities in the month of December. The average one-bedroom rent was $1,825, which was a -1.1 per cent decrease month-over-month, and 3.5 per cent increase year-over-year, while the average two- bedroom rent was $2185, which was a -1.8% decrease month-over-month, and a 1.9% increase year-over-year.
Brantford finished 23rd out of 35 cities in the month of December. The average one-bedroom rent was $1,704, which was a -2 per cent decrease month-over-month, and 4.4 per cent increase year-over-year, while the average two-bedroom rent was $1,969, which was a -2.4 per cent decrease month-over-month, and a two per cent increase year-over-year.
Niagara Falls finished 26th out of 35 cities in the month of December. The average 1 bedroom rent was $1,636, which was a -2.2 per cent decrease month-over-month, and -11.5 per cent decrease year-over-year, while the average two-bedroom rent was $1,923, which was a -3.5 per cent decrease month-over-month, and a -8.7 per cent decrease year-over-year.
St. Catharines finished 27th out of 35 cities in the month of December. The average one-bedroom rent was $1,593, which was a -4.2 per cent decrease month-over-month, and 0.4 per cent increase year-over-year, while the average two-bedroom rent was $1,944, which was a -0.5 per cent decrease month-over-month, and a -4.3 per cent decrease year-over-year.
