Canadians may still be forking over a big chunk of their paycheques to their landlords each month, but a new report from Rentals.ca and Urbanation shows that rental rates continued to cool in February amid a complete reversal of the high-demand, low-supply scenario of 2022 and 2023.
At a national level, asking rents averaged $2,088 last month, marking the fifth consecutive month of decline and a 4.8% decrease over February 2024. This is also the lowest asking average reported since July 2023.
“The year-over-year decrease in February was the steepest since April 2021 during the COVID-19 pandemic, representing a dramatic trend reversal from a year earlier in February 2024 when asking rents increased 10.5% annually,” said the report, released Monday. “Despite the recent decline, average asking rents remained 5.2% higher than two years earlier in February 2023 and 16.9% higher than the pre-COVID level five years ago in February 2020.”
Even so, average asking rents have slipped by $105 each month over the past year. Conversely, the average asking increased by $209 each month between February 2023 to February 2024.
“Rents in Canada are softening as supply is outweighing demand,” Urbanation President Shaun Hildebrand said in a press release. “Apartment completions are currently running at record highs, while at the same time, population growth has slowed and the economy faces heightened risks due to a potential trade war with the US. Expect rents to continue decreasing in the near-term as these trends likely remain in place.”
Softer conditions were most apparent in the condo segment, where average rent fell 7.6% year over year to $2,192 in February, marking the sixth consecutive month of decline and a 26-month low. Within the condo subset, studio rents came down 10% year over year, followed closely by one-bedrooms (down 8.8%), two-bedrooms (down 7.6%), and three-bedrooms (down 3.5%).
Meanwhile, purpose-built apartments rented for $2,070 (down 1.9% year over year), and within that property type, rates fell for 2.3% for one-bedrooms and 2.7% for two bedrooms, and rose 1.4% for studios and 3.8% for three-bedrooms.
Across provinces, Ontario experienced the largest rent decline in February, with the average rate slipping 4.2% year over year to $2,329. In Toronto, the average rate clocked in at $2,615, marking a year-over-year decrease of 6.7%. On a monthly basis, Toronto’s average was unchanged.
British Columbia experienced a lesser annual decline of 1% to an average of $2,457, while Vancouver’s average asking dropped 4.8% year over year to $2,870 — “the lowest level since April 2022” and marking “nearly a three-year low.”
Although Alberta posted a “marginal” 1.4% annual gain in its average asking rent to $1,732, it’s largest city, Calgary, posted the steepest decrease of Canada’s largest market, with rents sliding 7% to an average of $1,916. On the contrary, Edmonton saw rents rise 2.9% year over year to $1,531.
“Milder annual rent declines for apartments were reported in Montreal (-3.0% to $1,974) and Ottawa (-0.2% to $2,217),” said Tuesday’s report.
The cooling off of the rental market was also evident when looking at the data for shared accommodations in February. For one, listings were down 29% month over month and 0.6% year over year. In addition, rents were down to varying degrees across the four provinces tracked for this type of rental: British Columbia, Alberta, Ontario, and Quebec.
“At an average of $964, shared accommodation rents were 4.6% lower than last year,” according to the report.
Roommate rates dipped in all of Canada’s largest markets as well, with Toronto seeing the steepest year-over-year decline, at 8.2% to an average of $ 1,176. Montreal followed close behind with an 8% drop to an average of $870.
