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Canadian Rental Market Outlook Asking Rent Prices Touched Record High – National Rent Report 2024

Exploring the complex fabric of Canada’s rental scene unveils a captivating story of remarkable expansion, varying regional patterns, and expectations for the coming year. The most recent information from the Rentals.ca Network of Internet Listings Services (ILS) presents a nuanced viewpoint, delivering insights that go beyond traditional analyses.

National Overview: Surging to New Heights

Asking Rents Soar to Record Highs

In December 2023, the average asking rents for all residential property types in Canada touched a historic pinnacle at $2,178. This marked an 8.6% surge from the preceding year, showcasing the resilience and dynamism of the Canadian rental market.

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A Two-Year Ascension

Over the past biennium, asking rents in Canada have soared by a staggering 22%, translating to an average monthly increase of $390. The robust 8.6% surge in 2023 follows a 12.1% spike in 2022 and a 4.6% uptick in 2021. Delving deeper into the data, the five-year average annual increase in asking rents stands at 4.9%, considering the tumultuous 2020 marked by a 5.4% decrease due to the COVID-19 fallout.

Gazing into 2024: Balancing the Scales

Looking ahead to 2024, the rental market in Canada is poised to maintain its undersupplied status but with a prospect of increased equilibrium. Rent growth is anticipated to converge towards its five-year average of approximately 5%. Projections indicate that rental demand, while remaining robust, might witness a degree of moderation compared to 2023 due to economic deceleration, a decrease in non-permanent residents, and a surge in homebuying activity amid declining interest rates.

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Segmental Insights: Traditional Apartments Lead the Way

In 2023, traditional purpose-built rental apartments emerged as the frontrunners, boasting the lowest average rents at $2,076 but recording the fastest growth at an impressive 12.8%. This surpasses the average rent of $2,340 for condominium rentals and $2,354 for home rentals, which experienced relatively slower annual growth of 6.9% and 5.9%, respectively.

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One-Bedroom Marvels: The Epitome of Growth

Zooming into specific unit types, one-bedroom apartment rents experienced the most significant surge in 2023, growing by an impressive 13%. These cozy abodes now command an average rent of $1,932, leading the pack in rental growth. Studio rents followed closely behind, with an 11.9% uptick, settling at an average of $1,552. Two-bedroom apartments recorded a respectable 9.8% increase, with rents averaging $2,301, while three-bedroom rents saw a 9.9% annual rise, reaching an average of $2,579.

Provincial Dynamics: Alberta Takes the Lead

Alberta’s Ascendancy

In 2023, Alberta emerged as the provincial powerhouse, witnessing a remarkable 16% growth in apartment rents. December figures revealed an average rent of $1,691, marking a substantial increase from the 16.8% surge recorded in 2022. The western province’s prowess in rent growth underscores its resilience and attractiveness to renters.

Provincial Peaks and Valleys

B.C. maintained its status as the most expensive province for apartment rents, despite a marginal 1.4% year-over-year decrease, settling at an average asking rent of $2,500 in December. Ontario followed closely, with average apartment rents of $2,446, reflecting a 3.7% annual increase. Quebec experienced a notable acceleration in rent growth, rising to an average of $1,953 in December, marking a 10.0% increase compared to the previous year. Nova Scotia, after a remarkable 31.4% surge in 2022, witnessed a -2.4% decrease in apartment rents year over year, settling at an average of $2,129.

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Municipal Showdown: Calgary and Edmonton Take Center Stage

Calgary’s Commanding Growth

Among Canada’s largest cities, Calgary stole the spotlight with the fastest annual rent growth for apartments in December 2023. Rents surged by 14.0% from a year ago, reaching an average of $2,071. This follows a substantial 22.6% surge in 2022, reaffirming Calgary’s prominence in the rental market.

Edmonton’s Ascent

Edmonton, with average asking rents considerably lower than Calgary at $1,467, experienced a noteworthy annual rent growth of 13.5% in 2023. This underlines the diverse opportunities and growth trajectories within Canada’s major metropolitan areas.

Vancouver and Toronto: A Deceleration Tale

In contrast, Vancouver and Toronto, Canada’s most expensive major markets, witnessed a considerable slowdown in rent increases in 2023. Vancouver’s average asking rents for apartments declined by -0.7% annually in December, settling at $3,059. Toronto saw a modest 2.1% increase from a year ago, reaching an average of $2,832. This deceleration hints at potential shifts in these traditionally high-growth markets.

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Quebec’s Resilience: A Regional Perspective

The Quebec Anomaly

Quebec markets exhibited a distinctive resilience and growth pattern in 2023. Despite broader market trends, the province experienced faster rent growth for apartments compared to 2022, with a notable 10.0% increase. The average rent in December reached $1,953, showcasing the province’s ability to navigate through economic variations.

Small and Mid-Sized Marvels

The four highest-priced small- and mid-sized markets for apartment rents were all located in B.C., led by North Vancouver ($3,361), Burnaby ($2,928), Richmond ($2,898), and Coquitlam ($2,886). Richmond Hill in Ontario secured a spot in the top five, with an average rent of $2,782. The remaining top 25 markets predominantly resided within the Greater Toronto Area, with notable exceptions like Kanata ($2,497), Barrie ($2,250), and Guelph ($2,238). Two Montreal suburbs, Mount Royal ($2,347) and Côte Saint-Luc ($2,316), also featured among the most expensive in Canada.

Quebec’s Fastest Growers

Quebec claimed the spotlight in terms of the fastest-growing rental markets. Pointe-Claire and Quebec City led the pack, posting annual growth rates of 25.6% and 18.9%, respectively, in December. Other Quebec markets contributing to this growth included Laval (+15.4%), Saint-Laurent (+15.3%), Côte Saint-Luc (+13.4%), and Longueuil (+6.8%). This regional diversity in growth underscores the nuanced dynamics of Canada’s rental landscape.

Beyond Borders: Noteworthy Growth Across Provinces

Beyond Quebec, notable growth in apartment rents was witnessed in various provinces. In B.C., New Westminster led with an impressive 18.8% surge, while Coquitlam followed closely with a 12.5% increase. Alberta exhibited robust growth in Lloydminster (+17.7%) and Red Deer (+14.8%). Ontario’s fastest-rising markets were Waterloo (+14.4%) and East York (+12.2%), showcasing diverse growth patterns across the province. Two Saskatchewan cities, Regina and Saskatoon, made the list of fastest-growing, with rents up 13.3% and 8.0% annually in December, respectively.

Rentals.ca Data: Unveiling the Methodology

Methodological Insights

The data underpinning this analysis stems from the Rentals.ca Network of ILS, offering a comprehensive perspective covering both primary and secondary rental markets. Encompassing various dwelling types, from basement apartments to single-detached houses, this dataset provides a more inclusive portrayal compared to CMHC’s primary rental data, which focuses solely on purpose-built rental apartments and rental townhouses.

Distinctive Characteristics

It is crucial to recognize the distinctive characteristics of the Rentals.ca Network of ILS’s data. Unlike CMHC’s approach, which considers the entire universe of purpose-built rental units, Rentals.ca’s data focuses solely on available (vacant) units, offering a real-time reflection of ongoing market trends. This distinction results in higher rental rates, capturing the dynamic nature of market shifts.

Exclusion Criteria

To ensure the integrity of the data, properties listed for over $5,000 per month and below $500 per month are excluded. Similarly, short-term rentals, single-room rentals, and furnished suites are removed when identifiable. This meticulous curation ensures a more accurate representation of prevailing market conditions.

Conclusion

In concluding this comprehensive analysis, it becomes evident that Canada’s rental market is a dynamic ecosystem characterized by multifaceted growth patterns, regional differentials, and evolving tenant preferences. As we navigate the intricate nuances revealed by the Rentals.ca data, we gain unparalleled insights into the driving forces shaping the rental landscape. This nuanced understanding not only empowers stakeholders but also sets the stage for informed decision-making in an ever-evolving rental market.