The average cost of rent has climbed across the country.
According to the Rentals.ca and Bullpen Research & Consulting latest National Rent Report, the average rent for all Canadian properties in December was $1,789 per month, up 3.8% year-over-year.
This is the fourth consecutive month average asking rents were positive year-over-year based on Rentals.ca listings, following 16 consecutive months of annual decline brought on by the pandemic.
At first glance, there appears to be some good news for renters. For the first time since April, the average rent decreased month over month, falling 1.5% from $1,818 per month in November. As the report highlights, however, while rents were down in December, this is typical; rates tend to fall as prospective tenants are concentrating on the holidays and not looking for apartments.
Despite the recent recovery of the rental market in 2021, however, uncertainty surrounding the Omicron variant persists, with some parts in the country now in various stages of lockdown. For many professionals, the physical office remains closed for the foreseeable future, removing the necessity to live in urban centres for even longer.
But, as the report highlights, there is consensus among experts -- and hope for cooped-up Canadians -- that the lockdown measures and restrictions will be shorter lived than we’ve seen in the past. So, downtown rental units could once again be in hot demand in the not-too-distant future.
“Average rental rates moderated in December after rents surged following the April market bottom, where rents had fallen by over 9% annually,” says Ben Myers, president of Bullpen Research & Consulting. “It is too early to tell if Omicron will have a prolonged deflationary impact on the rental market, but Bullpen Research & Consulting and Rentals.ca still believe there will be significant upward growth in rents in 2022 in Canada’s major markets.”
Toronto finished second on the list of 35 cities for average monthly rent in December for a one-bedroom at $2,013 and for a two-bedroom at $2,715. Year over year, average monthly rent in December for a one-bedroom in Toronto was up 9.2% and up 11.6% for a two-bedroom. Month over month, average rent in Toronto was down 1.4% for a one-bedroom and down 2% for a two-bedroom.
Toronto average rent increased from $2,046 in December 2020 to $2,266 this December. The average rent per-square-foot in Toronto decreased throughout 2020 to a low of $3.15 before sharply recovering to $3.63 this December. Not surprisingly, the city’s downtown core saw the highest levels of annual change in average rent in 2020, ranging from 2.4 per cent to 25 per cent. The areas with the largest increase in average rent in the final six months of 2021 were in the downtown west area, and along Yonge Street near Bloor.
Eight of the top 11 cities and areas on the list of 35 with the highest rent for a one-bedroom home in December were part of the Greater Toronto Area.
Coming as no shock to anyone, Vancouver tops the price charts, with an average monthly rent for all properties at $2,519 per month, an annual increase of 15% from the December 2020 average of $2,189 per month. This is followed by Oakville -- something that may come as a surprise to some -- where the average rent for all units is now $2,473 per month, an annual increase of 9.9% from its December 2020 average of $2,251 per month.
Across the country, in December, the average rent for a single-family home was $2,570 per month -- an annual increase of 8.9%, but still below pre-COVID-19 highs. Average rent had declined 9.3% in the pandemic-impacted 2020 to $2,360.
Canada's condos experienced an annual increase of 11% $2,227 per month in December. "Condos were hit the hardest during the early pandemic period as some tenants fled the big cities and their expensive housing, with condo rents falling by a whopping 18% to $2,008 annually in December 2020 from $2,459 in December 2019," reads the report. Apartments have not experienced the same levels of increases as single-family homes and condo apartments, increasing annually just over 1% from $1,603 per month in December 2020 to $1,623 per month this December.
As it stands, the rental market in Canada is returning to levels seen at the start of 2020, but remains $165 below the peak average rent of $1,954 in September 2019, according to the report.
Moving forward, Meyers remains firm on his stance that rents will rise as we move through 2022 -- as much as 11%.
