The average asking price for a rental unit in Canada reached $2,178 last month, a 9.9% year-over-year increase and continuing a trend that has seen asking rents hit new highs for six months in a row.
That’s according to the latest rental price report released by Rentals.ca and Urbanation, analyzing monthly listings from the former’s network. The findings show while October’s annual rate of rent growth in Canada was down from the 11.1% jump in September, it still marked the second fastest annual increase of the past seven months.
On a monthly basis, average asking rents increased 1.4% in October, a slight decrease from the monthly gains of 1.5% in September and 1.8% in August, which was attributed to seasonal factors.
The average cost of a one-bedroom unit in October was $1,906, up 14% from the same month in 2022, while the average asking price for a two-bedroom was $2,255, up 11.8% annually, according to the report.
Vancouver led the way again as Canada’s most expensive city for renters, with the average one-bedroom unit listed at $2,872 and a two-bedroom at $3,777 — both down from September’s asking prices, but up 6.7% and 5.5%, respectively, on an annual basis.
Toronto was the next highest ranked major city at $2,607 for a one-bedroom and $3,424 for a two-bedroom.
The report said rent inflation in Canada is being driven by price increases in Alberta, Quebec and Nova Scotia, in part because of strong population growth and large infusions of new rental supply priced at above-average market rents.
“I get asked all the time, ‘How are people affording this?’ The answer is they’re not,” said Rentals.ca spokesman Giacomo Ladas.
“Rents are getting so high to the point where people are almost out of options. They’re looking desperately to find more affordable rents.”
Calgary topped the list when measured by annual rent growth for apartments out of Canada’s largest cities for the ninth straight month.
Asking rents for purpose-built and condominium apartments in Calgary rose 14.7% year-over-year to reach an average of $2,093, while Montreal was in the second spot with annual rent growth of 10.2%, for an average of $2,046 in October, the data shows.
“We can tell that because there’s so much interprovincial migration going on that people are leaving areas like Ontario and B.C. and they’re searching for more affordable rents, and they’re going to places like Calgary,” said Ladas.
He noted a major factor driving up rent prices is the trend of fewer people looking to become homeowners, given the ongoing climate of high interest rates. One-third of Canadian households are renters, the rate for which is growing twice as fast as it is for homeowners, he added.
“People are not moving out and going into the home ownership market because they can’t with these rates,” he said.