While most major markets in Canada reported rent increases in September, a potential sign of a slowdown is emerging, particularly in Toronto.
The latest National Rent Report by Rentals.ca and Urbanation reveals that the Canadian rental market has continued its upward trajectory. Average asking rents across the country have seen a month-over-month increase of 1.5 per cent, reaching an average of $2,149. This marks an 11 per cent year-over-year growth, representing a nine-month high in the annual rate of rent inflation.
Toronto, the country’s largest rental market, experienced a deceleration in rent growth last month. Some experts suggest this could signal broader economic cooling and an increase in affordability constraints for renters. Additionally, shared accommodations have gained popularity, reflecting shifting preferences among renters.
“While rent inflation in Canada remained exceptionally strong in September, most major markets experienced a slower annual rate of rent growth compared to recent months,” says Shaun Hildebrand, president of Urbanation. “This was particularly true in Toronto, where rents grew by their slowest pace in two years.”
One-bedroom apartments lead the way in rent increases
One-bedroom apartments have seen the most significant annual growth in asking rents, surging by 15.5 per cent and now averaging $1,905. Two-bedroom units also saw substantial year-over-year growth, increasing by 13.1 per cent to reach an average rent of $2,268. Three-bedroom apartments followed suit with an 11.4 per cent increase, now averaging $2,514. Studio apartments, considered the most affordable option, experienced annual rent growth of 11.3 per cent, with an average rent of $1,511.
Nova Scotia and Alberta lead annual rent growth in purpose-built housing
Nova Scotia and Alberta have led the way in annual rent growth for purpose-built and condominium apartments, posting annual growth rates of 15.4 per cent and 15.3 per cent, respectively. Quebec and British Columbia also reported strong rent growth figures at 13 per cent and 12.3 per cent, while Ontario experienced a modest slowdown, with the rate dropping from 10 per cent in August to 6.6 per cent in September.
Calgary tops major cities in rent increases, Toronto’s growth slows significantly
Among Canada’s major cities, Calgary led with a 14.3 per cent annual increase in asking rents, reaching an average of $2,091. Montreal followed closely with a 10.2 per cent year-over-year increase, reaching $2,030. However, Toronto witnessed a significant slowdown, with rent growth slowing to 2.3 per cent.
Resilience in rent growth in small and medium markets
Medium and smaller markets across Canada have continued to see strong annual rent growth. Richmond, B.C. led the way with a 29 per cent increase, followed by Cote-Saint-Luc, Que. at 27.5 per cent. Red Deer, Alta., ranked third with an annual growth rate of 22 per cent, while Oakville, Ont. demonstrated the fastest rising rents with an annual growth rate of 19.4 per cent.
Halifax and Regina led the way in smaller provinces, with 15.5 per cent and 13.4 per cent annual rent growth rates, respectively.
Demand for shared accommodations on the rise
According to the report, the volume of listings for shared accommodations has seen a notable increase, rising by 27 per cent over the past three months compared to the previous year. This trend is particularly noticeable in B.C., with a 40 per cent increase in listings, and Ontario, with a 78 per cent increase. Average asking rents for shared accommodations have also grown by 18 per cent year-over-year, now standing at $944 per month.
