March 2023 Rent Report

Rents have Moderated Over the Past 3 Months

Asking rents in Canada increased 9.7% annually to an average of $1,984 in February. The annual rate of rent inflation has been moderating since reaching a high of 12.4% in November 2022. Rents decreased 0.6% from January 2023, the third consecutive monthly decline, and decreased by a cumulative 2.0% over the past three months, indicating some softening in the market related to reduced affordability in the rental market, a recent improvement in home-buying demand, and an increase in new supply from apartment completions.

Rent Report Graphic - March 2023_v4

National Overview

Avg Rent by Prop Type and Unit Type March 2023 v2

Average Listed Rent All Property Types Canada Feb 2023

Change in average listed rent by Time Period All Property Types, Canada, Feb 2023

The average asking rent for purpose-built and condominium apartments reached $1,908 in February, up 9.1% annually while posting a three-month decrease of 1.5%. Two-bedroom asking rents averaged $2,103, rising the fastest on an annual basis by 9.6% but recording the largest three-month decline of 1.4%. One-bedroom rents increased 8.3% year over year to $1,724, dipping 0.9% over the past three months. Rents for studios and three-bedrooms both increased 5.7% from a year ago to an average of $1,385 and $2,382, respectively. Three-bedroom rents recorded the smallest three-month decline of 0.3%.

Average Listed Rent by Bedroom Type Purpose-built and condo rental apt. Feb 2023

Change in avg listed rent by bedroom type purpose built and condo rent apt. Canada Feb 2023

Provincial Overview

Prov Total Listings Apts Condos March 2023 V2

*Totals are reflective of all available listings and not the data listed within individual tables

Quebec had the Fastest Rent Growth Over the Past 3 Months

Ontario led the country in annual rent inflation during February with 16.2% growth for purpose-built and condominium apartments, followed by Alberta and British Columbia where rents rose 14.5% and 11.4% year over year, respectively. Over the past three months, rents increased the most in Quebec (+2.9%) and Ontario (+1.0%), while all other provinces recorded three-month rent declines for purpose-built and condominium apartments.

Rents for purpose-built and condominium apartments remained highest in British Columbia during February at an average of $2,449, including $2,076 for one-bedrooms, $2,802 for two-bedrooms, and $3,233 for three-bedroom apartments. Ontario rents followed close behind at an average of $2,407, while the third highest rents were considerably less expensive in Quebec at an average of $1,808. Although Alberta rents have been increasing over the past year, they remain comparatively low at an average of $1,424, with one-bedrooms averaging $1,272, two-bedrooms averaging $1,587, and three-bedrooms averaging $1,655. Alberta has been recording the highest levels of interprovincial migration in Canada.

Avg listed rent by Prov./region and bedroom type Purpose Built and condo rental Apt. Feb 2023

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Municipal Rental Rates

Muni Avg Rent by Apt and Condos March 2023 V3

*Totals are reflective of all available listings and not the data listed within individual tables

Calgary Leading Rent Growth Among Canada’s Largest Markets

Among Canada’s largest markets, asking rents increased the fastest in Calgary over the past three months (+3.8%) and 12 months (+28.1%), reaching an average of $1,862 in February. Calgary rents remained below the national average, with one-bedrooms averaging $1,652, two-bedrooms averaging $2,035, and three-bedrooms averaging $2,370. Toronto experienced the second fastest annual rent growth of 22.8% despite recording a 0.9% three-month decline, reaching an average of $2,838. One-bedroom rents in Toronto were well above the national average, with one-bedrooms averaging $2,513, two-bedrooms averaging $3,324, and three-bedrooms averaging $3,843. Vancouver, which continues to be the most expensive of Canada’s largest markets, saw rents increase 19% annually to an average of $3,120 in February. Rents in Vancouver averaged $2,657 for one-bedrooms, $3,716 for two-bedrooms, and $4,317 for three-bedrooms.

Avg listed rent by bedroom type for largest markets Purpose built & condominium rental apartments Feb 2023

Change in Average Listed Rent Purpose Built and Condo Rental Apt. Feb 2023

Southwest Ontario Rents Surge in February

In mid-sized cities, average rents for purpose-built and condominium apartments were highest in cities in Metro Vancouver — including Burnaby ($2,902), Coquitlam ($2,726) and Richmond ($2,545) — and cities and areas in the Greater Toronto Area (GTA) — including Oakville ($2,579), Vaughan ($2,579), and Etobicoke ($2,546). The 12 most expensive mid-sized rental markets in February were all in Metro Vancouver and the GTA.

The seven fastest growing mid-sized markets for purpose-built and condominium rents in February were all in southwestern Ontario, with annual rent growth led by Brampton (+30.1%), Kitchener (+28.2%), Scarborough (+28.1%), North York (+26.5%), London (+23.1%), Hamilton (+22%) and Mississauga (+18.9%).

Avg Listed Rent for Purpose built and condo rental apt. selected mid sized markets Feb 2023

Ann. Change in Avg. Rent for Purpose built and Condo Apt. Selected MId Sized Markets Feb 2023 Data

The data used in this analysis is based on monthly listings from the Network of Internet Listings Services (ILS). This data differs from the numbers collected and published by the Canada Mortgage Housing Corporation (CMHC).

The 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 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.

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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.