Rentals.ca October 2022 Rent Report
The average rent for all property types across Canada in September 2022 was $2,043 per month, representing an annual increase of 15.4%. The average rent is up 4.3% monthly and 21.9% from the recent market low of $1,676 per month in April 2021. The average rent is now about $100 more than the pre-pandemic peak level from the fall of 2019.
1. National Overview
The chart below shows the average monthly asking rent based on Rentals.ca listings for single-family houses, townhouses, rental apartments, condominium apartments, and basement apartments cumulatively over the past three years (red line, right axis), with the annual change in average rent below (grey bars, left axis).
Continued strong demand, plus the completion of a number of new purpose-built rental apartments with high rents, contributed to the significant annual rent increase.
Average Rent by Property Type and Month
The chart below shows the average rent and average rent per-square-foot by property type in September of 2019, 2020, 2021 and 2022 based on Rentals.ca listings data in Canada.
The average rent for single-family homes in September 2022 was $3,014 per month, which is 12.1% higher than September 2021. Rent per-square-foot (psf) was $1.70 in September of this year, compared to $1.62 and $1.71 in September 2021 and 2020.
The average rent for condo apartments was higher this September versus last September at $2,382 per month versus $2,211 — the average prospective tenant looking for a condo to lease is looking at spending 7.7% more than last year. The rent per-square-foot increased slightly from $2.92 psf in September 2021 to $2.97 this year. It should be noted that not all properties on Rentals.ca have their square footage included with their listing, so the sample size is smaller and skews high because unit sizes are more likely known in newer buildings and properties.
The average rent for traditional rental apartments was $1,810 per month in September 2022, up 11.8% annually. The increase was 9.8% year over year on a per-square-foot basis to $2.46.
The sample sizes nationally for townhouses and basement apartments are relatively small, but both experienced considerable rent growth in September 2022 versus one year earlier.
Average Rent by Bedroom Type
The next chart presents data on the average rent and the annual change in average rent by bedroom type for all property types in Canada based on Rentals.ca listings for the first three quarters of 2020, 2021 and 2022. The average annual change is marked below the average rent, and the colours correspond to those annual changes.
Studio units had an average rental rate of $1,366 per month in September 2022, representing an annual increase of 6.3%, and were $22 more expensive than last month on a national basis. One-bedroom units had an average rental rate of $1,656 per month, an increase of 7.3% annually. One-bedrooms have the same average rent in the third quarter as Q1-2020, the last bedroom type to get back to pre-pandemic rent levels.
Two-bedroom units had an average rental rate of $2,067 per month, which was an increase of 12% year over year, which is the highest growth rate among all bedroom types this quarter. Three-bedroom units had an average rental rate of $2,486 per month, representing an annual increase of 11%.
Four-bedroom units had an average rental rate of $3,090 per month, an increase of 4.8% since last year. Due to the wide range of offerings of four-bedroom units, the rent levels can be somewhat volatile on a quarterly basis as these units are typically single-detached homes with vastly different unit sizes and lot sizes.
Rental rates for four-bedroom units showed the lowest annual appreciation this quarter by bedroom types, in contrast to Q3-2021, where growth was the strongest.
2. Provincial Overview
The map below shows the average rent for all property types by province in Canada. The bottom panel in the chart below presents data on the average rent in September 2021 and September 2022, as well as the annual change in rent.
British Columbia had the highest average rental rate based on all property types at $2,682 per month in September 2022, an annual increase of 31%, after experiencing a yearly decrease of 1.0% in September 2021.
Nova Scotia had significantly higher average rents in September 2022 versus a year earlier, climbing from $1,810 per month to $2,453 per month, and is now higher than Ontario on average. Rental rates in the province have skyrocketed, increasing almost 36% year over year. Newfoundland, another Atlantic-area province experiencing noteworthy rent growth, has a rent level that is half of Nova Scotia at $1,209 per month on average, but rents are up 29.7% annually from $932 in September 2021. Similar to British Columbia, Newfoundland experienced an annual decrease in the same month last year of 1.9%. However, this is based on a small sample size of listings and might not be representative of the provincial movements.
3. Ranking of Municipalities (and former municipalities) by Rentals.ca Pageviews
What are the most popular cities in Canada on Rentals.ca? The chart below ranks these municipalities and former municipalities based on online “pageviews per listing” in July, August and September over the past three years.
Given the substantial annual rent growth in British Columbia, it is unsurprising that five of the top 10 municipalities for popularity in September of 2022 are in that province, with Burnaby ranked first, and with Vancouver, New Westminster, Richmond, and North Vancouver ranked fourth to seventh. Vancouver has been ranked in the top five in the nine months displayed in the chart.
Three of the top 10 came from Ontario, with Waterloo second, followed by Mississauga in ninth, Toronto (old city boundaries, pre-amalgamation) in 10th, with the former City of Etobicoke just out of the top 10 at eleventh.
Before 2020, Montreal was in the top 10 municipalities in Canada in terms of pageviews per listing, but has consistently ranked 23rd to 25th over the last two and a half years. A larger supply of rentals in that market prevents any one listing from attracting a lot of viewers.
Areas where demand is cooling include Surrey, Victoria, Ottawa, and Hamilton, while Waterloo, St John’s and Mississauga are seeing demand pick up.
4. 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 September 2022, with the annual per cent change in average rent shown on the right (includes former municipality of Toronto prior to amalgamation). The colour coding reflects the province.
Vancouver had the highest average rental rate for condominiums and rental apartments at $3,225 per month and the third highest annual rent inflation at 29.3%. London had the highest annual rent growth at 33.1%, while Toronto was second at an increase of 31.2%.
Calgary had the fifth-highest annual growth rate in average rent at 24.1%, significantly higher than Alberta’s other major city, with Edmonton at 7.4%.
The two cities with the lowest change in rent were Gatineau at 2.3% and Fort McMurray at 2.4%.
Condo Rental Rates by Municipality
The chart below looks at the average condo rent by month from the start of 2020 to September 2022 in Vancouver, Toronto, Ottawa and Montreal. The average rents for September are shown in each of the last three years, before the pandemic started impacting the rental rates. The size of the markers reflects the average suite size.
Condominium investors in old Toronto and Vancouver saw rental rates plunge during the pandemic, with rates dropping in February 2021 to lows of below $2,053 in Toronto and $2,332 in Vancouver. Since then, rental rates have rebounded, and by September 2022 had reached $2,988 in Toronto, an increase of close to 46% from the market bottom, and $3,587 in Vancouver, an increase of nearly 54% from February 2021.
Rentals in Ottawa and Montreal have not seen as much rental variance as in Vancouver and Toronto. Ottawa condos are offered at $2,162 per month, up from the pandemic low, but lower than September 2021. Montreal condo rents were $1,961 per month on average in September of this year, with a two-year low of around $1,705 at the beginning of 2021. Montreal condo rents are up 7% annually and 15% from the pandemic-era nadir.
The next chart looks at the average unit size for Rentals.ca listings in Vancouver, Toronto and Ottawa for single-family homes, condominium apartments and rental apartments.
The pandemic had a big impact on the composition of listings in several markets, as larger single-family properties and larger condos gained in popularity, leasing quickly, as tenants needed more space to work and educate from home (leading to smaller average listings in Q3-2020 and Q3-2021). As employers have brought employees back to the office, smaller units in centralized locations are in demand, and there are more large units on the market in comparison to previous years, leading to a higher single-family unit size of 1,854 square feet in Vancouver and 1,605 square feet in Toronto.
The data shows that the square footage of single-family homes in Vancouver was 1,370 in Q3-2020, with Q3-2022’s 1,854 being 35% larger, which is nearly back to 2019 levels of 1,937 square feet. Toronto was similar, seeing a low of 1,179 square feet in Q3-2020 before increasing 36% to its Q3-2022 average of 1,605 square feet (but is below its 2019 levels of 1,834 square feet).
In Vancouver, Toronto and Ottawa, the average condo for rent was 824 square feet, 742 square feet and 776 square feet, respectively. The sizes are larger in Vancouver and Toronto as smaller units are being snapped up by people moving back to the downtown core areas, and by tenants that can’t afford big units following the recent run-up in rents.
Vancouver Rental Rates by Postal Code
The map below shows the average rent and annual change in average rent by postal code in the Vancouver area for all property types in 2022.
Some areas have a relatively small sample size of listings on Rentals.ca, and the annual rent growth can be impacted by the composition of the suites year to year.
This year, the five postal codes with the most listings in the Vancouver area are V6B, V6E, V6G, V6Z and V7P. Among these postal codes, the most expensive rent is V6B which rents at an average of $3,462, while the lowest is V6E at $2,873. The highest growth year over year among these top areas was also V6B which saw an increase of 37.8%, while the lowest was V7P, still at a robust 23.8%.
Rent continues to increase significantly both nationally and in Canada’s largest municipalities, growing 15.4% annually. However, this data is slightly skewed because the average unit size for listings on Rentals.ca is larger in September 2022 (963 square feet) versus September 2021 (868 square feet). Also, a few new purpose-built rental apartments started lease-up programs in September, adding a lot higher-priced supply to the market.
Many of the same factors that have been affecting rental demand are still influencing the market in September. Interest rate increases are damaging ownership affordability and keeping prospective buyers in the rental market. Secondly, a softening ownership market, with forecasts for further declines are keeping prospective buyers on the sidelines, waiting for the market to bottom out. However, that ownership market slump is resulting in would-be sellers listing their properties for rent, instead of selling them, adding to the number of listings on the market. In fact, the total number of listings on Rentals.ca in September was the highest since Rentals.ca and Bullpen Consulting started this report in October 2018.
A sign that the rental market pressure will ease up is the pageviews per listing in September declined to about the average level experienced from Q2-2020 to Q1-2022, before the interest rate hikes. Secondly, the rental market is seasonal, so demand is less in November through February every year.
When controlling for the types of units offered in the market, rent growth is below the 15% rate nationally with both single-family properties and rental apartments seeing 12% annual rent growth.
We will continue to monitor the data and break it down by property type, bedroom type, size and area, to get a better understanding of market trends moving forward, check back every month for the latest findings.
Ben is the President of Bullpen Research & Consulting Inc., a boutique residential real estate advisory firm.
With over 15 years of real estate research experience in both the United States and Canada, Ben has acquired extensive knowledge on land values, new home prices and rental rates, and macro-level housing trends. Ben has held several positions in Toronto, including urban economist at Altus Clayton, and Executive Vice President at condominium apartment data tracking firm Urbanation Inc. Ben has previously been the keynote speaker at ULI and PWC’s flagship Emerging Trends Conference.