Canadian rent prices end 2023 at a record high, up 22% in two years

Rent prices resumed their upward trajectory in December, ending the year 8.6% higher from a year ago.

The average rent price for all unit types rose to $2,178, according to data from Rentals.ca‘s latest monthly data. Looking back over the past two years, rent prices have risen 22%, or an average of $390 a month.

“The rate of rent growth in Canada was stronger than expected in 2023, mainly due to a surge in non-permanent residents, a resilient economy, and a sharp pullback in home buying activity,” said Shaun Hildebrand, President of Urbanation.

“While rents are expected to continue rising in 2024, there should be less upward pressure on the market this year as demand increases at a somewhat slower speed and more supply is added.”

2024 rental market outlook: expect more moderate growth

In its report, Rentals.ca forecasts 2024 to be more balanced, with annual rent price growth moderating closer to its 5-year average of around 5%.

More affordable markets, like Alberta, should see above-average rent increases throughout the year, while more expensive markets, including B.C. and Ontario, are likely to see rents grow below the national average.

Still, Rentals.ca says the country’s rental market is likely to remain under-supplied.

“Rental demand is expected to remain strong, experiencing some moderation compared to 2023 due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates begin to decline,” the report notes.

It added that a continued rise in apartment completions and an expected increase in tenant turnover this year “should add more supply to the market in the near term and help temper rent growth.”

Alberta saw fastest growth in rent prices

Alberta once again posted the fastest year-over-year increase in rent prices, which were up 15.6% to $1,691 in December.

Quebec (+10%) and Saskatchewan (+10%) also continued to see strong price growth in the year.

Rent prices were lower in Nova Scotia (-2%) in December, although this followed a 31.4% rent price surge in the previous year. Rents were also down slightly in British Columbia (-1.4%), which remains the country’s most expensive rental market with an average asking rent of $2,500.

Slowdown in rent prices in Toronto and Vancouver

Cities in Western Canada continued to see the fastest pace of rent price growth in December, with the exception of Quebec City, where rents were up 18.9%. In Calgary, rents rose 14% year-over-year, followed closely by Edmonton, where rents rose 13.5%.

Canada’s most expensive markets continued to see a moderation in rent price growth, with asking rents rising just 2.1% in Toronto and down 0.7% in Vancouver.

Here’s a look at the year-over-year rent increases in some of the country’s key markets:

• • Calgary, AB: +14% ($2,071)
  • Regina, SK: +13.3% ($1,293)
  • Montreal, QC: +11.3% ($2,019)
  • Ottawa, ON: +7.5% ($2,228)
  • Winnipeg, MB: +5% ($1,558)
  • Toronto, ON: +2.1% ($2,832)
  • Vancouver, B.C.: -0.7% ($3,059)