The rise, detailed in the latest National Rent Report by Rentals.ca and Urbanation, sheds light on many factors driving the increase. From post-secondary students securing leases ahead of the fall term to a surge in population growth, several elements are contributing to last month’s uptick.
Annual increase of 8.9% in average asking rent marks fastest growth in 3 months
In July, Canada’s rental market saw an 8.9 per cent annual increase, marking the fastest pace of growth over the past three months. A 1.8 per cent hike in average asking rents compared to June represented the most rapid month-over-month increase in the last eight months.
This escalation has led to a 21 per cent rise in average asking rents compared to July 2021, translating to an additional $354 per month on average for renters across the country, the report explains.
Perfect storm of factors
A confluence of factors has driven rents to record heights, according to the report.
“Canada’s rental market is currently facing a perfect storm of factors driving rents to new highs,” remarks Shaun Hildebrand, president of Urbanation. “These include the peak season for lease activity, an open border policy for new residents, quickly rising incomes, and the worst ever homeownership affordability conditions.”
The recent interest rate increase by the Bank of Canada to a 22-year high has temporarily sidelined potential homebuyers, leading to increased demand within the rental sector.
Calgary’s lead in Growth, Montreal’s remarkable acceleration, and Vancouver’s pinnacle position
In July, Calgary remained the fastest-growing rental market among Canada’s largest markets, with annual asking rents for purpose-built and condominium apartments rising by 16.1 per cent to reach $2,036, which is slightly below the pace seen in June (18.4 per cent).
Montreal’s rental market, on the other hand, has seen a remarkable acceleration. From an 11.2 per cent increase in June, the city’s average asking rent rose by a substantial 15.3 per cent in July, establishing an average asking rent of $1,987.
Meanwhile, Vancouver maintains its position as the market with the highest average asking rent among the largest cities, at $3,340. This reflects a 12.2 per cent annual rise and a 2.9 per cent monthly increase.
Unit breakdown
Specific unit types have shown varying degrees of growth. One-bedroom apartments have taken the lead, posting a 13 per cent annual increase and a monthly rise of 2.5 per cent. One-bedroom rents averaged $1,850, followed by two-bedroom units at $2,191 and three-bedroom units at $2,413.The average rent of a studio apartment in Canada reached $1,445.
Mid-sized markets
Greater Montreal has emerged as a top contender for the fastest-rising rents in the mid-sized market category. Laval experienced a staggering annual growth of 28.5 per cent, reaching $2,011, while Cote Saint-Luc witnessed a notable 23 per cent increase, reaching $2,306. In British Columbia, Richmond and New Westminster exhibited annual growth rates, at 27 per cent and 20.7 per cent, respectively.
Roommate accommodations gain traction
In addition to traditional rentals, roommate accommodations have seen a notable increase in asking rents across various provinces. Over the past year, British Columbia, Alberta, Ontario and Quebec collectively experienced an average growth of 16.1 per cent, resulting in average roommate rents of $971.
Quebec boasted the fastest annual increase at 23.8 per cent, averaging $901, while British Columbia saw a 20.4 per cent rise, with an average of $1,163. Alberta’s roommate rents increased by 14.4 per cent to $810, and Ontario saw a 7.1 per cent growth, reaching an average of $1,009.
Vancouver and Toronto secure the top spots in average asking rents for roommate rentals, with averages of $1,455 and $1,296, respectively.
