Canada’s rental market is experiencing a drop in asking rents for the first time since the pandemic began. The November 2024 Rentals.ca Rent Report shows a 1.2% year-over-year decline in average rents nationwide, bringing the figure to $2,152 in October. This marks a significant shift, as rents had been steadily climbing since July 2021.
While major cities like Toronto and Vancouver are leading this decline, smaller markets are still experiencing rent increases. This changing landscape presents real estate agents and mortgage brokers with new challenges and opportunities. Let’s dive into the details and explore what this means for professionals navigating Canada’s evolving housing market.
Condo Rents See Notable Declines Amid Mixed Trends in the Rental Market
The rental market for purpose-built and condominium apartments is showing mixed trends. The average asking rent for these units edged up by just 0.5% year-over-year to $2,122 in October. While purpose-built apartments experienced a modest 1.7% increase, averaging $2,100, condo rents dropped 3.8% to $2,265.
Diverging Trends in Purpose-Built Rentals
Purpose-built studio apartments saw significant demand, with rents jumping 7.4% to an average of $1,622. Similarly, three-bedroom units experienced a robust 7.5% increase, reaching $2,673. However, one-bedroom purpose-built apartments dipped slightly by 0.1% to $1,903, while two-bedroom units rose by a modest 1.0% to $2,292.
Condos Hit Hard, Particularly Smaller Units
Condo rents showed the steepest declines, with studio units dropping 6.9% to an average of $1,874. One-bedroom condos weren’t far behind, falling 3.3% to $2,057, while two-bedroom units slipped 4.0% to $2,386. Interestingly, three-bedroom condos bucked the trend with a 2.8% increase, bringing the average rent to $2,889—likely reflecting limited supply in this category.
The rental market’s mixed performance highlights shifting dynamics. Smaller units face cooling demand, while larger ones see rising interest, potentially signaling evolving renter preferences.
BC Cities Lead the Pack in Falling Rental Prices, Including Vancouver
Known for its sky-high rents, British Columbia is now experiencing some of the steepest declines in rental prices across Canada. Vancouver’s average asking rent for a one-bedroom unit dropped to $2,610 in October—a sharp 9.1% decrease compared to last year. This was the second-largest year-over-year decline among cities, surpassed only by neighboring Burnaby.
Burnaby’s average one-bedroom rent fell to $2,398, marking a 9.4% annual decline. Remarkably, over 3.8% of this decrease occurred in October alone, reflecting a sudden and dramatic shift in rental market dynamics. The pace of these declines underscores a rapidly changing sentiment in BC’s rental market.
Greater Toronto Rents Plummet Almost as Fast as BC’s
Ontario’s rental market, particularly around Greater Toronto, is experiencing a sharp decline. In October, the City of Toronto saw one-bedroom asking rents drop by 8.7% year-over-year to $2,380. This significant decrease was tied with Oakville ($2,304/month; -8.7% y/y) for the third-largest annual drop in the country. Oakville, part of the same regional real estate board, highlights how this trend could ripple through the area’s investor-heavy housing market, potentially affecting home sale prices.
Emerging Affordable Markets: Where Renters Can Still Find Deals
Despite leading the charge in rental price declines, British Columbia and Ontario remain home to Canada’s priciest mid-sized cities. North Vancouver tops the list with an average rent of $3,141, followed by Coquitlam, Richmond, and Burnaby, all exceeding $2,700. Ontario’s Mississauga and Oakville also rank among the top ten most expensive cities.
Conversely, Alberta offers some of the most affordable rental markets, with Lloydminster standing out at just $1,176 per month. Other budget-friendly cities include Fort McMurray, Grande Prairie, Red Deer, Medicine Hat, and Lethbridge—all with rents well below the national average. Windsor and Abbotsford emerge as affordable options in Ontario and B.C., with average rents of $1,623 and $1,877, respectively.
Interestingly, several smaller cities are defying the national trend of declining rents. Lloydminster saw a staggering 24.3% annual growth, while Pointe-Claire, Saskatoon, Lethbridge, and Gatineau also posted double-digit increases, proving that pockets of strong rental demand persist even in a cooling market.
The Growing Popularity of Shared Accommodations
As traditional rental markets face uncertainty, shared accommodations are surging in popularity. Listings jumped by 12% month over month and an impressive 58% year over year, offering tenants and landlords a more flexible and affordable alternative in markets with limited conventional rental options.
In October, shared room rentals grew significantly, particularly in single-family homes. Quebec led with a 5.3% rise to an average of $910, followed by Alberta at $904 (+3.9%), British Columbia at $1,205 (+2.5%), and Ontario at $1,081 (+1.2%).
Among major cities, Edmonton posted the most substantial annual increase at 7.3%, with rents averaging $791. Meanwhile, Toronto and Ottawa saw slight declines. Unsurprisingly, Vancouver retained its status as the most expensive city for shared accommodations, with rents averaging $1,490 after a 2.4% increase.
This shift toward shared housing highlights how renters are adapting to a dynamic market, seeking creative solutions to balance affordability and convenience.
Rents Climbing in Federal Workforce Hubs Despite Nationwide Declines
Not all cities are following the downward trend. Saskatoon recorded the fastest annual growth in one-bedroom rents, climbing 16% to an average of $1,293 monthly. However, even this city experienced a sharp 1.5% decline in October, suggesting a cooling market. Similar trends were observed in Quebec City ($1,429/month; +10.9% y/y) and Regina ($1,296/month; +8.9% y/y), which posted steep monthly declines of 3.9% and 2.5%, respectively. Quebec City’s drop was the fastest in Canada last month.
Conversely, only four cities bucked the trend with positive monthly rent growth: Laval ($1,672/month; +3.2%), Niagara Falls ($1,698/month; +3.1%), Gatineau ($1,755/month; +0.9%), and Ottawa ($2,040/month; +0.2%). These gains were largely anticipated in regions with large federal government workforces, as the government recently mandated a return-to-office policy. The move aimed to boost urban real estate values but raised questions about its long-term sustainability.
A Sudden Shift in Sentiment or a Reaction to Immigration Policy?
At first glance, these dramatic shifts could be linked to Canada’s recent policy shift aimed at slowing population growth—a move expected to significantly impact housing demand. However, since the policy was announced late in the month, most listings were active before its effects could take hold. This downturn likely reflects tempered market expectations, particularly in Toronto, where rental vacancy rates began climbing earlier this year, surpassing pre-pandemic levels.
Investors may need to rethink their strategies in this evolving market, as fluctuating demand and regional disparities create a complex landscape for renters and landlords alike.
