Average asking price for Canadian rental unit hits record high in June: Rentals.ca

The average to ask The price for a rental home in Canada hit a record $2,042 last month amid continued interest rate hikes and population growth, according to a new report from Rentals.ca and Urbanation.

The data, which analyzed monthly ads from the Rentals.ca network, showed that year-over-year rental inflation for June was 7.5 percent, below the double-digit growth seen for most of 2022 and early 2023. .

Rents also rose 1.4 percent from May, marking the fastest month-over-month increase for units listed on the website so far this year.

“What the country is experiencing right now is a perfect storm of circumstances,” said Shaun Hildebrand, president of Urbanation, a real estate research firm.

“It is interesting that rents continue to grow at such a rapid rate despite the fact that the number of rental apartments in Canada has been high for decades now. It really shows that the housing sector is not producing enough rental supply to meet this record level of rental demand.”

The average the cost of a one-bedroom unit was $1,780 in June, up 10.2 percent from the same month in 2022.

Hildebrand said demand is driven by Canada’s rapid population growth, much of which comes from non-permanent residents, such as foreign students renting, along with near-historically low unemployment, rising incomes and “the worst home affordability.” house in more than a generation”. for starters.”

High interest rates are a “key ingredient” to the lack of housing affordability, Hildebrand said. He predicted that the Bank of Canada’s latest rate hike earlier this week would worsen existing barriers to entry for renters looking to buy a home.

“It will reduce supply by keeping tenants in their units longer. It will convert more potential first-time buyers into longer-term tenants,” he said.

“Just as meaningfully, it will slow down the delivery pipeline of new apartment projects, as higher interest rates obviously increase development costs.”

Vancouver led the way as Canada’s most expensive city for renters, with the average one-bedroom unit listed for $2,945 and one with two bedrooms for $3,863, followed by nearby Burnaby, BC, according to the report.

Toronto ranked third with $2,572 for a one bedroom and $3,301 for a two bedroom.

That’s according to a separate report released Thursday by the Toronto Regional Real Estate Board average Condominium apartment rents in the Greater Toronto Area continued to grow faster than inflation in the second quarter of 2023.

The average the rent of a one-bedroom apartment in those three months was $2,532, an increase of 11.6 percent compared to 2022. average two-bedroom rent rose 9.2 percent to $3,264 during the same period.

RBC economist Rachel Battaglia said those regions, along with Halifax, continue to see rental vacancy rates hovering around one percent or lower — well below the three percent that experts consider a sign of a balanced market.

She said Canada’s annual population growth in the second quarter reached its fastest rate since the 1950s.

“We have a population that is growing at a pretty amazing rate,” Battaglia said, noting that international immigrants tend to spend the first five to seven years of their lives in Canada renting, which is straining the rental market.

“While there have been some healthy additions to the rental housing stock, it just hasn’t kept pace with demand.”

Have for the past two years average to ask rents in Canada are up 20 percent, or one average of $341, according to the Rentals.ca report.

On a monthly basis, rental growth in June was strongest for the smallest and least expensive unit types, with studio and one-bedroom prices rising 2.6 and 2 percent respectively over the month.

Each of Canada’s six largest cities saw double-digit annual rental inflation for purpose-built apartments and condominiums in June.

Vancouver and Toronto, the most expensive rental markets in the country, did average to ask rents of $3,301 and $2,813, respectively, representing annual growth rates of 15.7 and 15.4 percent. Ottawa, the third most expensive of Canada’s largest markets by average to ask rent of $2,146 in June saw growth of 15.3 percent.

Calgary overtook Montreal as the fourth most expensive of Canada’s largest cities average to ask rents for purpose-built apartments and condominium apartments are growing at an annual rate of 18.4 percent to $2,008, surpassing the $2,000 level for the first time.

“The areas of the country experiencing the fastest population growth are the areas experiencing the fastest rent increases. I don’t think it’s a coincidence,’ said Hildebrand.

“Areas like Calgary, Toronto and more specifically markets like Scarborough and Brampton, which tend to attract a high percentage of new immigrants, are seeing rent increases that are really at the top of the list.”