Average Canadian annual rents see lowest increase in 18 months

A recent National Rent Report by Rentals.ca and Urbanation has revealed that the average rents in Canada experienced a 6.5 per cent increase in May, marking the lowest annual rise since December 2021.

However, when considering all property types on the Rentals.ca Network, the average rent still surged by 19 per cent over the past two years.

In terms of monthly changes, the average rents in Canada saw a 0.6 per cent growth, reaching $2,014. This upward trend in average rents is expected to persist due to factors such as increasing immigration  and the rising cost of homeownership.

The average home prices are still on the rise, and the Bank of Canada recently raised interest rates by 25 points on June 7, bringing them to a 22-year high of 4.75 per cent.

“Higher rents are on the horizon with interest rates at a 22-year high, rising home prices and record immigration,” said Matt Danison, CEO of Rentals.ca Network.

“Gen Z could become the ‘Boomerang Generation’ moving back in with the parents or the ‘Roommate Generation’ splitting rent as it’s unaffordable for many Canadians to pay rent on their own. Governments at all levels need to come up with creative solutions to increase housing supply.”

“The rental market is expected to heat up further as it enters the seasonal peak for demand during the summer months, driven primarily by an incoming surge in international students and continued deterioration in homeownership affordability as interest rates move higher again,” said Shaun Hildebrand, president of Urbanation.

Once again, Vancouver stood at the top of the list among 35 cities for average monthly rent. In May, the average monthly rent for a one-bedroom home in Vancouver was $2,831, while for a two-bedroom, it was $3,666.

Compared to the previous year, the average monthly rent for a one-bedroom in Vancouver saw a 16 per cent increase in May, and for a two-bedroom, it rose by 8.7 per cent.

Toronto secured the second position on the list for average monthly rent in May. The average monthly rent for a one-bedroom in Toronto was $2,538, and for a two-bedroom, it was $3,286. Year over year, the average monthly rent for a one-bedroom in Toronto experienced a 17.5 per cent increase, and for a two-bedroom, it rose by 12.4 per cent.

Montréal ranked 26th in terms of average monthly rent in May. The average monthly rent for a one-bedroom home in Montréal was $1,657, while for a two-bedroom, it was $2,172. Year over year, the average monthly rent for a one-bedroom in Montréal increased by 6.8 per cent, and for a two-bedroom, it rose by 8.1 per cent.

In Toronto, the average annual rents for purpose-built and condominium rentals surged by 15.5 per cent in May, reaching $2,808.

In Calgary, rents for purpose-built and condo apartments averaged $1,944, experiencing a year-over-year increase of 14.6 per cent in May. However, this growth rate was lower compared to the 22.9 per cent annual growth witnessed in April.

Ottawa also saw a 14.6 per cent annual growth in rents in May, with the average reaching $2,134.

Vancouver, known for being the most expensive among Canada’s largest cities, had average rents of $3,137 for purpose-built and condo apartments in May. However, the annual rate of rent growth in Vancouver slowed down to 9.7 per cent, down from 16.8 per cent in April.

In May, among a list of 25 mid-sized cities and areas in Ontario, fifteen of them witnessed the fastest year-over-year rent increases for condo rentals and apartments.

At the top of the list, Scarborough experienced a significant annual rent surge of 29 per cent in May, reaching an average of $2,527.

Several mid-sized markets in the Greater Toronto Area (GTA) and its surrounding areas also recorded double-digit annual rent growth in May. Brampton saw a 23 per cent increase, North York experienced a 22 per cent rise, Guelph observed a 19 per cent upswing, Markham had an 18 per cent increase, Hamilton witnessed a 16 per cent surge, Vaughan noted a 15 per cent rise, and both Mississauga and Burlington saw a 14.6 per cent increase. Etobicoke followed with an 11.5 per cent rise.

Maintaining its position as the most expensive midsize market in Canada, Oakville had an average rent of $3,373 for purpose-built and condominium apartments in May.

Out of the 25 cities and areas on the list, ten mid-sized cities in the GTA were among the top 14 most expensive. The rents in these cities ranged from $2,634 in North York to $2,527 in Burlington.

In May, Alberta emerged as the leading province in terms of annual rent growth, with average rents for purpose-built and condominium apartments rising by 13.4 per cent year over year to reach $1,521. Despite this increase, Alberta’s rents still remained 22 per cent below the national average in Canada.

Ontario witnessed the highest surge in average rents during May, experiencing a 12.4 per cent year-over-year increase to reach $2,409 for purpose-built and condominium apartments.

Meanwhile, Québec also observed significant double-digit annual rent growth in May, with a 10.6 per cent increase, resulting in an average rent of $1,875.

In May, British Columbia retained its status as the most expensive province, with average rents reaching $2,468 for purpose-built and condo apartments. However, the rate of rent growth in British Columbia slowed down to 5.2 per cent.

Additional insights from the Rentals.ca Network’s June National Rent Report include the following.

In May, roommate rents in Vancouver and Toronto exceeded $1,000, with an average of $1,433 in Vancouver and $1,299 in Toronto. In Ottawa, the average roommate rental was $947, while in Montréal, it stood at $930. In Calgary, roommate rentals averaged $843, and in Edmonton, the average roommate rental was $712.

Compared to the previous year, the average rents for purpose-built and condominium apartments exhibited a slower growth rate of 7.3 per cent in May, down from 10.1 per cent in April. For one-bedroom purpose-built and condo apartments, the average rent in May was $1,770, while two-bedroom rents averaged $2,127.