Rentals.ca Rent Report January 2024 Press Release

Asking rents for all residential property types in Canada increased by 9% in 2023 according to Rentals.ca and Urbanation’s latest National Rent Report. The average asking rent reached a record high of $2,178 in December 2023, showcasing an 8.6% increase from the same period in 2022.

Over the past two years, asking rents in Canada saw a 22% increase, representing an average monthly increase of $390. The 8.6% year-over-year increase in 2023 follows a 12.1% increase in 2022 and a 4.6% rise in 2021.

“The rate of rent growth in Canada was stronger than expected in 2023, mainly due to a surge in non-permanent residents, a resilient economy, and a sharp pullback in home buying activity,” said Shaun Hildebrand, President of Urbanation. “While rents are expected to continue rising in 2024, there should be less upward pressure on the market this year as demand increases at a somewhat slower speed and more supply is added.”

Traditional purpose-built rental apartments reached an average asking rent of $2,076, and experienced the fastest growth in 2023, posting a 12.8% increase. In contrast, condominium rentals and house rentals saw relatively slower annual growth rates of 6.9% and 5.9%, respectively, with average rents of $2,340 and $2,354 as of December.

In 2023, one-bedroom apartment rents grew by 13%, reaching an average of $1,932. Studio rents followed closely behind with an 11.9% increase, averaging $1,552 in December. Two-bedroom apartments witnessed a 9.8% annual increase to an average of $2,301, while three-bedroom rents rose by 9.9% to reach an average of $2,579.

Alberta emerged as the province with the fastest-growing rents for purpose-built and condominium apartments in 2023, recording a 15.6% annual increase to reach an average of $1,691. British Columbia maintained its position as the most expensive province for apartment rents, averaging $2,500 in December despite a 1.4% year-over-year decrease. Ontario recorded a 3.7% annual increase, with average apartment rents slightly below B.C. at $2,446. Quebec experienced faster rent growth for apartments in 2023 compared to 2022, with average rents rising 10.0% to $1,953 in December.

Among Canada’s largest cities, Calgary posted the fastest annual rent growth for apartments in December, with rents rising by 14.0% from a year ago to an average of $2,071. Edmonton followed with a 13.5% annual rent growth, reaching an average of $1,467. Montreal secured the third spot in 2023 with an 11.3% annual rent growth, pushing average apartment rents up to $2,019.

After posting annual rent increases of more than 20% in 2022, Vancouver and Toronto experienced a considerable slowdown in rent growth in 2023. Vancouver's average asking rents decreased by 0.7% annually to $3,059, while Toronto's asking rents for apartments increased by just 2.1% from a year ago to an average of $2,832.

As we enter 2024, the rental market in Canada will remain undersupplied but is anticipated to exhibit a somewhat more balanced trajectory. Rent growth is projected to converge towards the five-year average increase of approximately 5%.

Anticipated factors influencing the rental market in 2024 include a slowing economy, a reduction in the number of non-permanent residents, and an improvement in homebuying activity fueled by declining interest rates. The introduction of more apartment completions and an anticipated increase in tenant turnover are expected to inject additional supply into the market, mitigating rent growth compared to 2023.

The National Rent Report charts and analyzes monthly, quarterly and annual rates and trends in the rental market on national, provincial, and municipal levels across all listings on the Rentals.ca Network for Canada. The data from the digital rental platform Rentfaster.ca is incorporated into this report.

Rentals.ca Network data is analyzed and the report is written by Urbanation, a Toronto-based real estate research firm providing in-depth market analysis and consulting services since 1981.