Rent prices rose 9% in April, and could keep rising with a housing slowdown
With rising rental demand outpacing available inventory, rent prices rose an average of 9% across the country in April compared to last year.
The average monthly rent reached $1,821 in the month, continuing its upward trend from the low of $1,676 seen last April in the midst of the pandemic, according to data from Rentals.ca. It’s still shy of the pre-pandemic rent levels of around $1,845 in 2019 and 2020.
Rises in rent prices were most pronounced in both Toronto and Vancouver, which saw average year-over-year increases of 17.2% and 23.7%, respectively.
“A return to the office, high gas prices, and rising interest rates are all fuelling demand for centrally located rental offerings,” said Ben Myers, president of Bullpen Research & Consulting.
real estate analyst Ben Rabidoux of Edge Realty Analytics said this is to be expected in a cooling housing market, since “people need to live somewhere.”
“If the resale market cools, demand by necessity shifts into rentals,” he wrote in his latest newsletter. “Throw in strong population growth, and we end up with a dramatic strengthening in the rental market in major metros.”
Myers added that average rental rates for single-family homes, townhouses and condominium apartments have experienced strong month-over-month growth due to a rise in demand for higher-end properties.
Average rent prices across Canada
Here’s a snapshot of some of the average rent prices from across Canada, along with the monthly percentage increase:
- B.C.: $2,347 (+2.7%)
- Ontario: $2,093 (+0.7%)
- Nova Scotia: $1,939 (+0.2%)
- Quebec: $1,672 (+1.2%)
- Manitoba: $1,341 (+0.9%)
- Alberta: $1,289 (+2.1%)
- Saskatchewan: $1,051 (+2.3%)
- Newfoundland & Labrador: $950 (+0.7%)
Strong demand expected to keep pushing prices up
On top of the normal increase in rental demand during the spring, demand is expected to be higher than usual due to current housing conditions.
“Higher interest rates and a cooling ownership housing market could push more demand into the rental market this spring,” Myers wrote in the March report.
Then there’s the organic demand due to the economic recovery and return to pre-COVID employment levels and an increase in net international migration.
Combined, the outlook is currently for rental demand–and prices–to continue rising throughout the year.
“Rental affordability continues to pose a significant challenge across the country [and] is set to decline from increasing rental demand and low stocks of rental housing,” according to the latest Rental Market Report from the Canada Mortgage and Housing Corporation (CMHC).