September 2023 Rentals.ca Report
Average asking rents in Canada increased 1.8% monthly and 9.6% annually to reach another record high of $2,117 in August. While the annual rate of inflation for asking rents was lower than the 12.0% increase recorded a year ago in August 2022, it represented a four-month high.
Asking Rents Up by More than $100 Over Past Three Months
Over the last three-month period between May and August, asking rents in Canada have increased by 5.1%, or by an average of $103 per month.
Despite rental apartment completions in Canada over the past 12 months reaching their highest level since the 1970s, rent growth has remained exceptionally strong. This can be attributed to the country’s record-high population growth and sharp deterioration in homeownership affordability.
Studios See Strongest Month-over Month Rent Increase
Asking rents for purpose-built and condominium apartments averaged a record high $2,046 in August, increasing 1.9% month-over-month and 12.8% year-over-year. Studios recorded the fastest month-over-month rent increase of 2.4% to reach an average of $1,480. One-bedrooms had the fastest year-over-year growth in asking rents at 14.8%, averaging $1,880 per month. Two-bedroom asking rents averaged $2,233 and three-bedroom asking rents averaged $2,448, increasing by 12.3% and 10.6% year-over-year, respectively.
Alberta Still on Top for Rent Growth in Canada
For the fourth consecutive month, Alberta was the provincial leader for annual rent growth for purpose-built and condominium apartments, with average asking rents up 15.6% year-over-year to $1,634. Alberta rents also grew the fastest month-over-month at 3.5% in August. For the third consecutive month, Quebec had the second highest annual rent growth in Canada at 14.2%, with average asking rents for purpose-built and condominium apartments reaching $1,932.
In B.C., where average asking rents of $2,675 were $1,041 higher than in Alberta, annual rent growth was 10.8% in August, rising from its 9.8% annual pace in July. Ontario’s average asking rents of $2,496 were $565 higher than in Quebec, posting an annual increase of 9.9% in August (compared to annual growth of 9.0% in July).
Rent increases were slowest over the past year in Manitoba and Saskatchewan, with annual growth of 8.3% and 2.7%, respectively, reaching average costs of $1,457 (MB) and $1,102 (SK).
Rent Increases were Below Average in Toronto and Vancouver
Calgary continued to lead rent growth among Canada’s largest cities, recording a 17.3% year-over-year increase in August to an average of $2,068 for purpose-built and condominium apartments. Montreal followed closely behind with annual growth of 16.4%, with asking rents surpassing $2,000 for the first time ($2,001). The most expensive of Canada’s largest cities in Toronto and Vancouver posted below average annual rent increases of 8.7% and 7.3%, respectively, reaching average monthly costs of $2,898 (TO) and $3,316 (VAN). Of note, average rents in Vancouver decreased 0.7% on a monthly basis.
Month-over-month rent growth was strongest among Canada’s largest cities in Ottawa (+4.5%) and Edmonton (+4.1%), where average asking rents for purpose-built and condominium rentals averaged $2,226 and $1,438, respectively.
Expensive Mid-Sized Markets Had Fastest Rent Growth
Some of Canada’s most expensive mid-sized markets had among the fastest rising rents during August. Richmond (BC) had the highest annual growth in average asking rents for purpose-built and condominium apartments at 28.1% in August, which raised costs to $3,120 — third highest among Canada’s mid-sized markets. Oakville (ON) rents were up 23.1% annually to $3,007 (fourth highest in Canada), while rents in Burnaby (BC) increased 21.1% year-over-year to $3,152 (second highest in Canada). North Vancouver (BC) had the highest average asking rents for purpose-built and condominium apartments among Canada’s mid-sized markets at $3,541, posting an annual increase of 17.0%.
Annual increases for purpose-built and condominium apartment asking rents were also strong in somewhat less expensive mid-sized markets including Brampton (ON) at 21.6% to an average of $2,713, New Westminster (BC) at 17.8% to an average of $2,511, and Côte Saint-Luc (QC) at 16.4% to $2,271.
In Alberta, asking rents in mid-sized markets grew fastest in Grande Prairie and Lethbridge (both at 9.3%) to an average of $1,169 and $1,276, respectively. In Saskatchewan and Manitoba, annual growth in asking rents for purpose-built and condominium apartments was strongest in Regina at 10.9% and Winnipeg at 8.3%, reaching averages of $1,199 and $1,465, respectively.
Rents for Shared Accommodations Continued to Rise Quickly
Ongoing tracking of asking rents for shared (roommate) accommodations in Canada revealed continued upward pressure during August. In Quebec, average asking rents for shared units rose 24.0% annually to $888 per month. This was followed by 20.5% annual growth in Alberta to an average of $851. In B.C., average asking rents for shared accommodations increased 17.7% annually to $1,150 per month, while roommate rents in Ontario grew by a more moderate annual pace of 7.5% to an average of $1,040.
The highest average asking rent for roommate rentals in Canada was in Vancouver at $1,773 per month, followed by Toronto at an average of $1,302.
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.