Apartments emerged as the frontrunners in rental growth during 2023, boasting the lowest average rents at $2,076 but experiencing the fastest growth at 12.8 percent.
Apartments emerged as the frontrunners in rental growth during 2023, boasting the lowest average rents at $2,076 but experiencing the fastest growth at 12.8 percent.
The average asking rents for all residential property types in Canada reached a record high of CAD$2,178 (US$ 1,619) by the end of 2023, marking a significant 8.6 percent increase from the previous year’s figure of CAD$2,005 (US$ 1,490), according to a recent report by Rentals.ca.
Rental market trends over two years
Over the past two years, the nation has experienced a cumulative surge of 22 percent in asking rents, translating to an average monthly increase of CAD$390 (US$290), as reported by CIC News. This follows an 8.6 percent uptick in rents in 2023, a 12.1 percent surge in 2022, and a 4.6 percent increase in 2021, with the latest five-year average annual increase pegged at 4.9 percent.
Apartments emerged as the frontrunners in rental growth during 2023, boasting the lowest average rents at $2,076 but experiencing the fastest growth at 12.8 percent. In comparison, condominium rentals and home rentals registered comparatively slower growth rates of 6.9 percent and 5.9 percent, respectively, with average rents at $2,340 and CAD$2,354 (US$ 1,750).
One-bedroom apartments across Canada recorded a significant growth of 12.7 percent in 2023, reaching an average price of CAD$1,932 (US $1,436). One step behind, studio rents observed an 11.9 percent growth, settling at an average of CAD$1,552 (US$ 1,154).
Meanwhile, two-bedroom apartments recorded an average rent of $2,301 (US$ 1,710), marking a 9.8 year-over-year increase. Although two-bedroom rents grew at a slower pace in 2023 compared to 2022, all unit types experienced faster rent growth overall.
Provincial overview
In terms of provincial and municipal overview, Alberta witnessed the fastest-growing rents for condominiums and apartments in 2023, with an annual increase of 15.6 percent in December, averaging CAD$1,691 (US$1,257). This followed a 16.8 percent surge in Alberta rent in 2022. Cities like Calgary and Edmonton saw the highest rent growth among major Canadian cities, with increases of 14 percent and 13.5 percent, respectively.
Despite recording a 1.4 percent decrease in rent prices compared to 2022, British Columbia maintained its position as the most expensive province to rent, with an average asking rent price of CAD$2,500 (US$1,858). This followed an 18.5 percent increase in rent prices during 2022.
Ontario’s average asking rent was slightly less than British Columbia at CAD$2,446 (US$1,818), experiencing a 3.7 percent increase in 2023. After extreme rent increases of 20 percent in 2022, Vancouver and Toronto’s rent hikes slowed considerably in 2023.
Quebec was the only province to experience faster rent growth for apartments in 2023 compared to 2022, with a 10 percent increase, raising rents to an average of CAD$1,953 (US$1,452) in December. Montreal ranked as the city with the third-highest rent growth of 11.3 percent, with apartment rentals averaging CAD$2,019 (US$1,501).
Nova Scotia witnessed a decrease of 2.4 percent in apartment rent prices, settling at an average of CAD$2,129 (US$1,583). This comes after a significant 31.4 percent surge in rent prices that occurred in 2022 when the province experienced a sharp rise in population and a higher-priced rental supply.
Outlook for 2024
Looking ahead to 2024, the Rental Report suggested that the Canadian rental market is anticipated to remain undersupplied but is expected to achieve a more balanced state, with rent growth inching closer to the five-year average of approximately 5 percent.
Furthermore, continued increases in apartment construction and tenant turnover are projected for 2024, contributing to increased supply and potentially slowing price growth.
Markets in Alberta are forecasted to experience above-average rent increases, while more expensive markets in BC and Ontario are expected to undergo rent increases below the national average.
International student cap
Immigration, Refugees, and Citizenship Canada has recently implemented a temporary cap on study visas for international students due to rising concerns about the integrity of the international student system and housing challenges.
The federal government faces scrutiny for its increasing intake of immigrants, both permanent and temporary, amid a severe housing shortage, the CTV news reported.
Internal documents revealed that public servants warned about the potential impact of ambitious immigration targets on housing affordability two years ago.
With immigration targets set at 485,000 for the current year and 500,000 for 2025 and 2026, the influx of temporary residents, particularly international students and migrant workers, has added pressure.
In response to housing demand, Miller considered implementing a cap on international students during the first and second quarters of the year.
However, he cited the need for a federal-level assessment before taking specific actions at the provincial level, considering financial capabilities and verifying offer letters for those coming to Canada.
Miller clarified that a cap on international students would not be a uniform solution to housing shortages across the country and noted the importance of evaluating the impact on various regions.
Prime Minister Justin Trudeau earlier dismissed the idea of blaming international students for the housing crisis, pointing to multiple contributing factors such as foreign homebuyers, aggressive developers, government under-investment, and the crisis’s decades-long development.
Housing challenges for int’l students
A previous report by BONARD highlighted Canada’s inadequate housing for international students, pointing out barriers for international investors, including a lack of research and limited portfolios.
The report noted Canada’s deficiency in affordable housing and purpose-built student accommodations, posing challenges for students and the country’s international reputation.
In 22 Canadian cities, there are 259,217 international students but only 155,692 purpose-built accommodation beds.
Ontario, home to half of Canada’s population, faces accommodation issues, leading to universities exploring public-private partnerships. Compared to the UK, Canada lags in private purpose-built student accommodations, constituting only 28 percent of total beds.
