For the first time in over three years, asking rents across Canada have experienced a year-over-year decline. According to a new report from Rentals.ca and Urbanation, the average asking rent in Canada dropped 1.2% in October 2024, bringing the national average to $2,152. This marks the first time since July 2021 that national rents have fallen, offering some relief for tenants after years of rapid increases.
Key Takeaways: National Rent Decline and Provincial Trends
While the national decrease may seem modest, the drop is concentrated in Canada’s major urban centres—cities like Toronto, Vancouver, Calgary, and Montreal have all seen significant reductions in average rents.
Ontario and British Columbia saw the largest provincial declines. In B.C., the average asking rent for an apartment fell by 3.4%, reaching $2,549, while in Ontario, rents dropped 5.7%, bringing the average to $2,350.
Cities with some of the largest rent decreases include:
Toronto: Average rent decreased by 9.2%, landing at $2,642.
Vancouver: A drop of 8.4%, bringing rents down to $2,945.
Calgary: Rent prices fell 4.7% to $1,995.
Montreal: Average rents dropped 2.9%, to $1,987.
However, not all markets are seeing a downward trend. Edmonton experienced the largest increase among major cities, with apartment rents rising by 8.4% to $1,584.
Why Are Rents Declining?
According to Shaun Hildebrand, president of Urbanation, several factors have contributed to the cooling of Canada’s rental market. The key drivers of rent growth in recent years—such as a strengthening economy, rapid population growth, and affordability issues in the housing market—are beginning to reverse.
Rising Population: A significant increase in population, particularly from immigration, has created more demand for rental units, driving rents higher. However, this demand is now beginning to stabilize.
Homeownership Affordability: Rising home prices and mortgage rates made homeownership less attainable, causing more people to rent. As affordability challenges in the housing market shift, fewer people are being pushed into the rental market.
New Construction: The increase in new apartment completions at record highs is helping to meet demand, reducing upward pressure on rents.
Rent Breakdown: One-Bedroom vs. Two-Bedroom
In October 2024, the average asking rent for a one-bedroom apartment across Canada was $1,923, which is down 0.8% from the previous year. Meanwhile, rents for two-bedroom units averaged $2,308, a slight decline of 0.2%.
Interestingly, there was a larger discrepancy between different types of rental units:
Purpose-built rental apartments saw an average rent increase of 1.7%, reaching $2,100.
Condominium apartments experienced a 3.8% decline, with an average rent of $2,265.
Regional Rent Trends: A Closer Look
While the national average may have dropped, the regional dynamics show a more complex picture:
Saskatchewan stands out as the fastest-growing province, with rents soaring by 17.1% year-over-year, though this represents a slight slowdown from September’s 23.5% growth.
Ottawa was one of the few cities where rents remained largely stable, with a 0.4% increase bringing average rents to $2,207.
What This Means for Tenants and Landlords
The slight national decrease in asking rents offers some much-needed relief for tenants, particularly those in major markets where rent has been skyrocketing for the past several years. However, these trends vary widely depending on location, with some provinces and cities still experiencing significant rent growth.
For landlords, the market is evolving. While some areas are seeing declines, the ongoing rise in purpose-built apartment completions and a stabilizing rental market could signal that rent growth may slow in the near future.
Tenants in cities with decreasing rents may benefit from lower rental costs, but those in markets with rising rents, like Edmonton, could continue facing higher rental prices. In general, renters should expect more stable rent growth over the coming months, especially as new housing supply enters the market.
Conclusion
The recent dip in asking rents marks an important shift in Canada's rental landscape. While national rents may be falling, the dynamics are complex and vary significantly by province and city. The trend of rising rents could be slowing down, thanks to new construction and changing economic factors. Whether you're a tenant looking for better deals or a landlord navigating these shifts, understanding these regional trends can help you make more informed decisions in the months ahead.
