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Asking rents jump 8.6% in December to hit record $2,178 on average



In a recent report released by Rentals.ca and Urbanation, the Canadian rental market witnessed a significant spike in asking rents during December 2023, reaching a record average of $2,178 per month. Although this figure remained relatively stable compared to the previous month, it marked an 8.6% increase from the same period in the previous year.


Breaking down the data, the report highlighted that the average monthly cost for a one-bedroom unit in December was $1,932, exhibiting a noteworthy 12.7% surge from the corresponding month in 2022. Two-bedroom units experienced a similar upward trend, with an average asking price of $2,301, representing a 9.8% annual increase.


Looking at the broader picture, rents showed an overall average increase of 8.6% for the entirety of 2023. This followed a 12.1% surge in 2022 and a 4.6% gain in 2021. Over the past two years, asking rents in Canada have seen a cumulative rise of 22%, translating to an average monthly increase of $390, according to the report.


The report delved into different housing types, noting that traditional purpose-built rental apartments saw the highest price growth in 2023, boasting a 12.8% increase with average rents at $2,076. In comparison, condominium rentals and home rentals experienced more modest annual growth rates of 6.9% and 5.9%, with average rents at $2,340 and $2,354, respectively.


Notably, the report highlighted a shift in the rental landscape for December in Canada's two most expensive cities, Vancouver and Toronto. Both cities experienced a decrease in the average asking rent for one-bedroom units on a monthly basis. Vancouver's average price dipped by 5.8% to $2,700, while Toronto saw a 2.8% decrease to $2,521. Nevertheless, both cities registered annual increases of 4% and 2.6%, respectively.


The province of Alberta took the lead in rent growth among Canadian provinces in 2023, with a significant 15.6% annual increase in December, reaching an average of $1,691 for purpose-built and condominium apartments. Meanwhile, British Columbia retained its status as the most expensive province for apartment rents, averaging $2,500, despite a marginal 1.4% annual decrease. Ontario followed closely with an average rent of $2,446, showing a 3.7% annual increase in December.


Looking ahead, the report anticipates that the rental market in Canada will continue to face supply challenges in 2024. However, it predicts a more balanced scenario, with rent growth expected to align more closely with its five-year average of approximately five percent. The report attributes this projected moderation to factors such as a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates decline.


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