Average asking rents for all residential property types in Canada ended the year at a record-high of $2,178 in December 2023, increasing 8.6% from a year ago in December 2022 ($2,005).
January 2024 Rentals.ca Report
January 2024 Rentals.ca Report
1. National Overview
Asking Rents in Canada Increased 9% in 2023 to Record High
Over the past two years, asking rents in Canada have increased by a total of 22%, or an average of $390 per month.
The 8.6% increase in rents in 2023 followed a 12.1% increase in 2022 and a 4.6% increase in 2021. The latest five-year average annual increase in asking rents was 4.9%, which includes a 5.4% decrease in 2020 resulting from the effects of COVID-19.
Rental Market Outlook for 2024
Looking forward to 2024, the rental market in Canada will remain undersupplied but should become somewhat more balanced this year, with rent growth expected to converge towards its five-year average of approximately 5%.
Rental demand is expected to remain strong, experiencing some moderation compared to 2023 due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates begin to decline.
As well, a continued rise in apartment completions and an increase in tenant turnover expected for this year should add more supply to the market in the near term and help temper rent growth.
Relatively affordable markets, such as those in Alberta, should continue to experience above-average rent increases, while more expensive markets, such as those in B.C. and Ontario, should continue to experience rent increases below the national average.
Traditional Apartment Rents See Fastest Growth in 2023
Traditional purpose-built rental apartments had the lowest average rents in Canada at $2,076 but posted the fastest growth over the past year with a 12.8% increase. This compares to an average rent of $2,340 for condominium rentals and $2,354 for home rentals, which experienced relatively slower annual growth of 6.9% and 5.9%, respectively.
One-Bedroom Apartment Rents Grew 13% in 2023
Apartment rents for purpose-built and condominium rentals increased 10.7% in 2023, matching the 10.7% growth in 2022 and ending the year at an average of $2,116.
Rents increased fastest for one-bedroom apartments over the past year (+12.7%), reaching an average of $1,932. Studio rent growth followed close behind (+11.9%), with rents averaging $1,552. Rents for two-bedroom apartments averaged $2,301, increasing 9.8% year-over-year, while three-bedroom rents increased 9.9% annually to an average of $2,579. Two-bedroom rents increased at a slower rate in 2023 compared with 2022, while all other unit types experienced faster rent growth in 2023.
2. Provincial Overview
Alberta Apartment Rents Grew 16% in 2023
Alberta was the province with the fastest-growing rents for purpose-built and condominium apartments in 2023, recording a 15.6% annual increase in December to reach an average of $1,691. This followed a 16.8% increase in Alberta rents in 2022.
B.C. maintained its position as the most expensive province for apartment rents with an average asking rent of $2,500 in December, despite recording a 1.4% year-over-year decrease. This followed an 18.5% increase in B.C. apartment rents during 2022.
Ontario apartment rents averaged slightly below B.C. at $2,446, increasing 3.7% annually in December, notably slower than the 15.5% increase recorded for Ontario in 2022. Quebec was the only province to experience faster rent growth for apartments in 2023 compared to 2022 (10.0% vs. 6.9%), raising rents to an average of $1,953 in December.
Nova Scotia after surging 31.4% in 2022, largely on account of a sharp rise in population and an infusion of higher-priced new rental supply, saw apartment rents decrease -2.4% year over year to an average of $2,129.
3. Municipal Overview
Calgary and Edmonton Lead Rent Growth Among Major Metros
Among Canada’s largest cities, Calgary posted the fastest annual rent growth for apartments in December, with rents rising 14.0% from a year ago to an average of $2,071. This followed a 22.6% surge in Calgary rents in 2022. In Edmonton, where average asking rents for apartments were considerably less than in Calgary at $1,467, annual rent growth accelerated to 13.5% in 2023. Montreal moved into third place in 2023 with annual rent growth of 11.3% in December, pushing average apartment rents up to $2,019.
After posting annual rent increases of more than 20% in 2022, asking rents for apartments in Canada’s most expensive major markets of Vancouver and Toronto slowed considerably in 2023. At an average of $3,059, asking rents for apartments in Vancouver declined -0.7% annually in December, while Toronto asking rents for apartments increased by just 2.1% from a year ago to an average of $2,832.
Quebec Markets Top List for Fastest Growing Rents
The four highest-priced small- and mid-sized markets for apartment rents in Canada were all located in B.C., led by North by Vancouver ($3,361), Burnaby ($2,928), Richmond ($2,898) and Coquitlam ($2,886). The top five was rounded out by Richmond Hill in Ontario, with an average rent of $2,782. Most of the remaining top 25 small and mid-sized markets with the highest rents were located within the Greater Toronto Area. However, other markets outside the GTA in Ontario also made the list, including Kanata ($2,497), Barrie ($2,250) and Guelph ($2,238). Two Montreal suburbs ranked amongst the most expensive in Canada, which included Mount Royal ($2,347) and Côte Saint-Luc ($2,316).
The two fastest-growing markets for apartment asking rents were in Quebec — Pointe-Claire and Quebec City — posting annual growth of 25.6% and 18.9%, respectively, in December. Other Quebec markets that made the list of fastest growing for rents included Laval (+15.4%), Saint-Laurent (+15.3%), Côte Saint-Luc (+13.4%), and Longueuil (+6.8%). The fastest rising rents in B.C. were found in New Westminster (+18.8%) and Coquitlam (+12.5%), while Alberta rents increased the most compared to last year in Lloydminster (+17.7%) and Red Deer (+14.8%). In Ontario, the fastest-rising rental markets were represented by Waterloo (+14.4%) and East York (+12.2%). Two Saskatchewan cities also made the list of fastest-growing, with rents in Regina and Saskatoon up 13.3% and 8.0% annually in December, respectively.
Rentals.ca Data
The data used in this analysis is based on monthly listings from the Rentals.ca Network of Internet Listings Services (ILS). This data differs from the numbers collected and published by the Canada Mortgage Housing Corporation (CMHC).
The Rentals.ca Network of ILS’s data covers both the primary and secondary rental markets and includes basement apartments, rental apartments, condominium apartments, townhouses, semi-detached houses, and single-detached houses. CMHC’s primary rental data only includes purpose-built rental apartments and rental townhouses. CMHC also collects data on secondary market rentals, but this is reported separately.
CMHC’s rental rates are based on the entire universe of purpose-built rental units (rental stock), regardless of rental tenure. CMHC rental rates are reflective of what the average household spends on rental housing and not the current market rents for vacant units. The data used in this report is based on the asking rates of available (vacant) units only and reflect on-going trends in the market. This covers a smaller sample size but is more representative of the actual market rent a prospective tenant would encounter. The Rentals.ca Network of ILS’s data typically provides much higher rental rates compared to CMHC, as vacant units typically reset to market rates when not subject to rent control.
The average and median rental rates in this report can also skew higher than CMHC’s data for the following reasons: the inclusion of larger more expensive unit types such as single-family homes, townhouse units, and large luxury condominium units; the presence of duplicate or multiple listings at the same property and the survivorship bias where more expensive or over-priced units take longer to lease and remain in the sample longer.
Properties listed for greater than $5,000 per month, and less than $500 per month are removed from the sample. Similarly, short-term rentals, single-room rentals, and furnished suites are removed from the sample when identifiable.
Urbanation is a real estate research firm providing market research.
Urbanation provides in-depth market analysis and consulting services to the apartment industry since 1981. Urbanation uses a multi-disciplinary approach that combines empirical research techniques, industry relationships forged over the past four decades, and first-hand observations and site visitations. Urbanation offers subscription services and custom market feasibility studies covering the new construction condominium and purpose-built rental apartment markets in Ontario.
