For the first time in over three years, asking rents across Canada have seen a year-over-year decline. According to a report from Rentals.ca and Urbanation, average asking rents dropped by 1.2% in October 2024, reaching $2,152 per month. This marks the first national decrease in rents since July 2021, signalling a shift in the Canadian rental market.
Why Are Rents Dropping?
The decline in rental prices is primarily concentrated in Canada's major urban centres, such as Toronto, Vancouver, Calgary, and Montreal. As rental demand begins to soften, the factors that previously fuelled rent growth—strong economic conditions, rapid population growth, and a lack of affordable housing—are starting to reverse.
Shaun Hildebrand, president of Urbanation, explained that this shift is largely due to a slowing economy, stabilising population growth, and decreasing homeownership affordability. Furthermore, apartment completions are at record highs, with more new rental units entering the market and providing renters with additional options.
As a result, rental prices in many cities across the country are beginning to trend downward, a rare occurrence after years of consistent increases.
Provincial Breakdown: Where Are the Biggest Changes?
The national rent decline has been particularly noticeable in British Columbia (B.C.) and Ontario, where average asking rents for apartments have dropped by 3.4% and 5.7%, respectively.
B.C.: The average asking rent for an apartment in B.C. decreased to $2,549, down 3.4% from the previous year.
Ontario: In Ontario, rents fell to an average of $2,350, marking a 5.7% drop.
While these provinces have seen significant decreases, other parts of Canada are experiencing the opposite. Saskatchewan, for example, saw rents rise dramatically, with asking rents up 17.1% in October. This marked the fastest growth in the country, following a 23.5% jump in September.
Rent Declines by City
Several major cities also saw notable declines in asking rents, particularly in the rental prices for apartments.
Toronto: Rents in Toronto dropped by 9.2%, with the average asking rent falling to $2,642.
Vancouver: Vancouver saw an 8.4% decrease, with average rents dropping to $2,945.
Calgary: In Calgary, apartment rents decreased by 4.7%, bringing the average to $1,995.
Montreal: Montreal recorded a 2.9% decrease, with the average rent falling to $1,987.
Interestingly, Ottawa experienced a slight uptick in rents, with a modest 0.4% increase, bringing the average rent to $2,207.
Edmonton Sees Rent Growth
While most of Canada's major cities saw rent declines, Edmonton bucked the trend. The city experienced an 8.4% increase in apartment rents, with the average rent rising to $1,584. This was the highest annual growth among Canada's largest cities, highlighting a growing demand for rental properties in the area.
A Glimpse at Rental Prices for Different Unit Types
Looking at specific types of rental units, the report showed the following trends for October 2024:
One-bedroom units: The average asking rent for a one-bedroom apartment across Canada was $1,923, down 0.8% compared to the previous year.
Two-bedroom units: The average asking rent for a two-bedroom unit was $2,308, slightly down by 0.2% year-over-year.
For purpose-built rental apartments, rents rose by 1.7%, reaching an average of $2,100 per month. Meanwhile, condominium rents saw a larger decline, falling 3.8% to an average of $2,265.
What Does This Mean for Renters and Landlords?
For renters, this is a welcome development, especially after years of rising rents in major Canadian cities. A decrease in rental prices—albeit modest—offers a glimmer of relief to those struggling to keep up with escalating housing costs. The increased availability of new rental units, coupled with softer demand, could further help renters in their search for affordable housing.
For landlords, the trend of decreasing rents may signal the need to adjust expectations and be more flexible in their pricing strategies. As the market stabilises, landlords may face increased competition for tenants, and pricing will likely become more sensitive to shifts in supply and demand.
Looking Ahead
As the rental market continues to adjust to shifting economic and demographic trends, it remains to be seen whether these declines will continue in the near future. With more apartments being built and a potential slowdown in population growth, it’s possible that rents will continue to ease in many parts of Canada.
Overall, this marks a pivotal moment in the Canadian rental market, as landlords and tenants alike navigate a landscape that’s been transformed by record-high rent prices over the past several years. If these trends persist, the Canadian rental market may become a little more tenant-friendly in the coming months, offering more affordable options in the country's largest cities.
