Rent inflation starting to moderate, but at a very slow pace

Posted on December 24, 2023 by admin

The latest National Rent Report by Rentals.ca and Urbanation reveals that asking rents for all types of residential properties in Canada remained near record highs in November, with an average monthly rent of $2,174.

While this figure was slightly lower than October’s record of $2,178, it marked only a modest 0.2 per cent month-over-month decrease.

Despite the rental market still showing considerable year-over-year growth, the rate of increase has been gradually falling. In November, there was an 8.4 per cent year-over-year rent rise, following annual growth rates of 9.9 per cent in October and 11.1 per cent in September.

“Rent inflation in Canada is slowly starting to moderate, a trend being led by a notable slowdown in rents in the country’s most expensive big cities of Vancouver and Toronto. Renters are adjusting to record high housing costs by shifting into less expensive markets,” Shaun Hildebrand, President of Urbanation, said.

In terms of apartment types, studio apartments experienced the highest annual growth rate in November, at 12.1 per cent, while one-bedroom apartments maintained strong annual rent growth at 13.6 per cent, albeit at a slower pace compared to previous months. Two-bedroom apartments saw a slowdown in annual rent growth, declining from 11.8 per cent in October to 11.2 per cent in November.

Regional disparities were evident in the data, with Alberta leading in annual growth for November, posting a year-over-year increase of 16.1 per cent, resulting in an average rent of $1,695. Conversely, British Columbia, which boasts the highest average apartment rents at $2,582, witnessed a 2.2 per cent month-over-month decrease and a significant slowdown in annual growth, down to 6.5 per cent in November.

In November, Edmonton overtook Calgary as the leader in rent growth among Canada’s largest markets, with asking rents for Edmonton apartments increasing by 11.9 per cent compared to the previous year. Meanwhile, Vancouver and Toronto, the nation’s most expensive major cities, experienced a marked deceleration in rent increases. Vancouver’s average asking rents increased by a modest 0.7 per cent annually, reaching $3,171, while Toronto’s average apartment rents declined for the second consecutive month, dropping 2.4 per cent to $2,913.

The report also highlighted that Canada’s 25 most expensive small and medium-sized markets are primarily concentrated in British Columbia, Ontario, and Quebec, with Greater Vancouver and Greater Toronto dominating the top rankings. Côte Saint-Luc in Quebec maintained its status as the fastest-growing market for apartment rents in October, with an impressive 29.4 per cent annual increase.

Shared accommodations in British Columbia, Alberta, Ontario, and Quebec reached a record high of $960 on average, marking a 16.2 per cent growth over the past year. Quebec experienced the most rapid growth in shared accommodation rents, with a 26.2 per cent increase, resulting in an average rent of $923, which includes Montreal’s average of $956.

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