The average rent for all Canadian properties listed for rent in May on was $1,814 per month, down 1.4% monthly and 5.4% annually. The median rental rate was $1,750 per month in May, down $50 from April 2020 and May 2019. The COVID-19 pandemic continues to put downward pressure on the rental market nationally, with rent down 7.2% from the market peak in September of last year ($1,954 per month).

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National Overview

1 Can Rent.pngThe Canadian Mortgage and Housing Corporation (CMHC) recently forecast that the resale housing market in Canada could see a decline in average prices of 9% to 18% annually. Secondly, CMHC would like to protect first-time buyers from taking on too much debt or becoming underwater on their mortgages by implementing changes to the mortgage insurance market. Homebuyers with mortgages insured by CMHC (less than 20% down payments), can no longer borrow their down payments, and must have a credit score of 680 or above.

Therefore, even if house prices decline and tenants are enticed to buy, they may no longer qualify for a mortgage with CMHC insurance. This will reduce ownership demand, and increase rental demand.

Average Rent by Property Type and Month

The chart below shows the annual change in average rent levels in Canada by property type from the start of 2019 to May 2020.

The sample sizes for basement apartments are small, which leads to significant monthly volatility. The number of townhouse units for lease on is relatively tiny as well, but townhouse rents increased both on an annual and monthly basis.

The most expensive units are single-family homes, with landlords asking $2,566 per month on average in May 2020, compared to $2,234 for condominium apartments, and $1,468 for rental apartments. Rental apartments typically account for about 55% of listings on, while condo apartments for lease make up about 25%, therefore, rental apartments best represent the overall conditions in the domestic rental market.

2 Property Type.png3 % Change.pngSingle-family homes (single-detached and semi-detached) experienced an annual decrease in average rent between May 2019 and May 2020, dropping by 5.1% annually.

Condo apartments experienced the steepest decline, with average rents offered by these private investors fell by 9.4% year over year.

Rental apartments, which were growing by 4% annually in January (and more than double that in November of last year), fell into negative territory in May, declining by 3.5% annually from $1,522 per month to $1,468 per month.

Rent Per Square Foot by Rounded Unit Size

The chart below shows the average rent per square foot for all property types by rounded unit size. Units are rounded to the nearest 100, and includes only units from 400 square feet (sf) to 1,500 sf.

Per-square-foot rent for units from 400 sf to 800 sf have declined by 8% to 14% annually in Canada, while units from 900 sf to 1,500 sf have declined by between 3% and 8% annually.

All of the rounded unit sizes under 1,400 sf experienced monthly declines in average rent per square foot.

It should be mentioned that not all units listed on have square footage included by the landlord or owner, and the listings that do likely skew new.

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Provincial Rental Rates

Most of the data above suggest the rental market is on a major downward trend, as many tenants have lost work because of COVID-19 and not looking for a place to rent, while other tenants are moving back in with their parents or relatives to save money. With many colleges and universities choosing to announce that classes will be held exclusively online in the fall, rental housing around these institutions has fallen off significantly.

The average rental rate in Ontario is down 0.6% monthly, while Saskatchewan is down 1.1% and Quebec is down 1.9%.

However, online activity on has picked up in all of the major provinces in Canada, and average rents have increased in May over April in Alberta, Manitoba and British Columbia.

5 Prov.pngWhen adding the number of instances that a prospective tenant requested the email or telephone number of a landlord (Total Leads) on by province, and comparing the May data to April data, there was a noteworthy jump month over month. The Total Leads in BC were up 112% monthly, with Manitoba up 106%.Ontario, Quebec and Alberta were up between 55% and 60%, while Saskatchewan increased by 40%.

Average Rental Rates by Metropolitan Area

The average property listed for rent on in May 2020 in the Vancouver Census Metropolitan Area (CMA) was offered at $2,214, which is actually up 3.8% monthly, and 1.6% annually. The average per-square-foot rent is up 3.3% annually.

In the Toronto CMA, the average rent for all property types declined for the sixth consecutive month in May to $2,266. The average rent in the metro area is down 4.7% annually. Per-square-foot rent is down 3.5% on average in May 2020 compared to May 2019 in the Toronto CMA.

In the Montreal CMA, the average rent declined by 3.9% monthly, but is still up 9.1% annually. Rent on a per-square-foot basis is up 26.3% annually from $1.67 psf in May of last year to $2.11 in May 2020, but is down from the market peak of $2.23 per square foot in February of this year.

6 Metro Areas.pngMetropolitan Searches by Rent Range

With rental rates declining since the start of the pandemic in the Toronto and Montreal CMAs, are prospective tenants changing their search criteria, and looking for cheaper properties? Keep in mind that renters are twice as likely as homeowners to have experienced a job loss as the result of COVID-19 shutdowns per the Labour Force Survey.

For this, we turned to Local Logic, which covers data on a number of Canadian real estate portals. In the Toronto CMA, there were actually fewer prospective tenants searching for apartments under $1,000 per month in May than there were in March as a percentage of the total at 3%. In Montreal, where there is a much larger number of less expensive apartments, the share of future tenants searching for apartments under $1,000 per month increased from 12% in March to 14% in May.

In terms of market share, there wasn’t much change in the percentage of tenants looking for apartments listed for rent at $3,000 per month or more in any of the three metro areas, however the Toronto CMA has more affluent tenants at about 20% of the market.

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Municipal Rental Rates

The chart below presents data on the average rental apartment and condominium apartment rental rates by municipality and area in Canada for May 2020, with the monthly percent change in average rent shown on the right.

9 Muni D.pngFollowing a whopping 11% monthly decline in April, the average apartment and condo rental in London increased by 2.9% monthly to $1,347 per month. Edmonton also suffered an 11% monthly decline in average rents for condo and rental apartments in April, but also bounced back in May, increasing by 1% month over month to $1,068.

The average rent in Toronto (former city boundaries, before amalgamation) declined by 0.5% in May to $2,290 per month, which follows the 5.9% monthly decline in April.

Condo Rental Rates Per Square Foot by Municipality

Leased condominium apartments are popular in Toronto and Vancouver, and the unit sizes are more readily available to owners and landlords for this property type. Condo apartments tend to be newer than rental apartments, and the suite sizes are promoted in the marketing and sales of the units when acquired by the owner or investor. This data helps in determining the rent per square foot which is a more accurate measure than the overall monthly rent, which doesn’t control for size.

At the end of 2019, the average asking rent per square foot in the former City of Toronto was $3.86 psf, but has fallen to $3.58 psf in May. Per-square-foot rent has declined by 9.5% annually in Toronto and 1% in May (following a 5.7% monthly drop in April).

Vancouver has the second highest rent per square foot in the chart below at $3.39 psf, which is down 5.4% annually and 2.4% monthly (following a drop of 8.8% monthly in April).

The condo rental market is much smaller in the nation’s capital, but Ottawa has remained fairly flat in terms of rents per square foot in 2020 at about $2.75 psf, which is up nearly 10% annually.

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Mode of Transportation by Metropolitan Area

There has been significant discussion as to whether COVID-19 will shift the preferences of tenants in terms of where they live. Will the work-from-home trend continue, allowing tenants to live much farther away from their place of employment if only the in-office requirement is the occasional meeting or event? Will the fear of being in a crowded subway cause tenants to move closer to work, so they can easily walk to their job? Will the fear of crowded spaces and cheaper gas prices cause tenants to rent a large-lot single-family home in the suburbs instead of an urban townhouse?

We again turn to Local Logic for data on percentage of tenant searches that include any of the following four choices: Cycle Friendly, Pedestrian Friendly, Car Friendly, and Transit Friendly. How have the percentages of each changed over the last three months?

8 Local Logic - Mode of Transport.pngIn the Toronto and Vancouver CMAs, there was a slight decrease in the share of searches that indicated the need for the rental property to be Transit Friendly, however in the Montreal CMA in May, Transit Friendly searches increased on a percentage basis to nearly one-quarter of the searches (the Montreal CMA has fewer car-centric greenfield suburban areas in comparison to the Toronto and Vancouver CMAs).

None of the markets saw an increase in Pedestrian Friendly searches (stagnant at 5%), while Cycle Friendly was desirable in only about 2% of searches.

With more people working from home, it is no surprise that there appears to be less interest in the mode of transportation, and likely a greater focus on other amenities related to the properties.

Toronto Insights

Change in Toronto Rents by Postal Code

Is it cheaper to rent in 2020 compared to 2019 in Toronto? The chart below looks at the change in average rent for condominium apartments and rental apartments in Toronto by postal code from January to May 2019 versus January to May 2020.

It is cheaper to rent downtown, with apartment properties (both tenures) in postal code M5E offered at $3,029 per month during the first five months of 2019 dropping by $449 to $2,580 per month.

The popular M5V postal code in the downtown west area (Entertainment District, Cityplace, King West) is down $118 this year from $2,630 per month on average from January to May in 2019 to $2,512 during the same time span in 2020.

Despite the soft rental rates associated with the pandemic, it is still more expensive on average to rent in many postal codes in Toronto, including M4L, which is up $507 per month.

As a reminder, the composition of the sample listings over the two periods can change, and M4L was likely pulled up by a number of listings at V6 Leslieville, a new rental project on Queen Street East.

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The average monthly asking rent for all property types in Canada on in May was $1,814, down 1.4% from April, and down $140 from the market peak of $1,954 in September of last year. However, many landlords continue to offer incentives both advertised and unadvertised, which can mask further market weaknesses.

Further changes to the mortgage insurance market by CMHC (so far unadopted by Genworth Canada), should prevent some would-be, first-time homebuyers from purchasing a home and staying in the rental market. As the economy slowly opens up and employers hire back workers, some consumer confidence should return and the fear of moving should start to subside, adding more movement and turnover. Despite the pandemic, tenants are still looking at apartments, the pageviews on the sample of listings on analyzed in this report have increased for the third consecutive month.

It is still unclear how much pent-up rental demand there is for apartments, and how COVID-19 will impact those decisions. Will the rent declines be enough for a tenant to leave a rent-controlled unit? Will tenants with roommates prefer to pay more for a one-bedroom apartment versus share a two-bedroom apartment because they are now working from home? Will tenants use the funds previously earmarked for commuting, eating out and vacations to move-up to a larger apartment? Will tenants who are uneasy about commuting via public transportation buy a car and now need a rental suite with a parking space? Will tenants move out of the urban markets for less densely populated areas to ensure proper social distancing? How many short-term rentals will survive the pandemic, and how many will remain rented to tenants on one-year leases?

There are so many unanswered questions, and the implications of those decisions will impact the rental market on both a macro and micro level. We will continue to monitor the data and examine the trends as the economy slowly opens up.