The average asking rent in Canada reached a record high of $2,078 in July, according to the latest rent report by Rentals.ca and research firm Urbanation. This is the first time average asking rents for purpose-built and condominium apartments have risen above $2,000.
The monthly report compared rents for apartments, condominiums and houses in mid-size and large housing markets across the country, and found rents increased 8.9 per cent annually in July. This is the fastest pace of growth of the past three months.
In fact, rents in July were 21 per cent higher than during the same period two years before, rising by $354 per month compared to July 2021.
Rents rose by 1.8 per cent on average from June to July, representing the fastest month-over-month growth in the past eight months. Real estate analyst David Aizikov attributes part of this increase to seasonal housing demands.
“Last month saw what is typically the peak in annual rental activity in Canada,”Aizikov told CTVNews.ca in an email on Friday. “With the resurgence of students returning to school, and in combination with the warm weather motivating others to make a move we saw strong rental demand and as a result an acceleration of rents.”
The report also cited record population growth and the high cost of homeownership – exacerbated by high interest rates – as factors driving high rents.
Since the Bank of Canada began a series of aggressive prime lending rate hikes in March 2022, mortgage interest costs have risen too, by as much as 30.6 per cent as of July. In its 10th rate hike since March, the central bank raised its benchmark interest rate by 25 basis points on July 12, marking the first time since early 2001 that the figure hit five per cent.
Among purpose-built apartment and condominium rentals, one-bedroom apartments saw the highest growth in July, with rents increasing by 13 per cent annually and 2.5 per cent monthly. Across the country, one-bedroom rents averaged $1,850, compared to $2,191 for two-bedroom units and $2,413 for three-bedroom units. The least expensive units across Canada were studios, with rents averaging around $1,445.
The cities with the top five highest rents as of August – not including cities smaller than mid-sized – were Vancouver; Toronto; Burnaby, B.C.; Mississauga, Ont.; and Richmond Hill, Ont. Average rents for one- and three-bedroom apartments in Vancouver were $3,013 and $3,918 respectively. In Toronto, they were $2,592 and $3,370 respectively.
Provincially, rents have increased the most year-over-year in Alberta, where the average asking rents in July were $1,578 – up 15.6 per cent compared to last July. Quebec had the second highest annual rent growth in Canada at 13.7. Average asking rents in that province reached $1,920 in July.
Since housing is one of the largest recurring expenses for Canadians, many opt to live with roommates as the cost of living rises. According to a December 2022 survey conducted by Maru Public Opinion for TD, 23 per cent of Canadians live with a roommate or family member other than their spouse or child. Among these respondents, 79 per cent said they would find it “very difficult” or “somewhat difficult” to be able to live on their own.
Rentals.ca’s August report shows Vancouver and Toronto had the highest average asking rents for roommate rentals in the country at $1,455 and $1,296 in July, respectively.
Average asking rents for roommate rentals in Canada in July 2023.Asking rents for roommate accommodations in B.C., Alberta, Ontario and Quebec rose by an average of 16 per cent over the past year, reaching an average among those provinces of $971. Quebec experienced the fastest annual increase in roommate rents, with rents growing by 23.8 per cent to an average of $901. In B.C., roommate rents were up 20.4 per cent compared to 2022, reaching $1,163. Alberta’s roommate rents increased by 14.4 per cent, reaching $810 and Ontario’s roommate rents increased by 7.1 per cent to $1,009, surpassing $1,000 for the first time.
Source: CTV News