Rent costs across Canada stormed higher in April, with the average monthly rental cost in Toronto hitting $2,526, according to a new report.
A Monday release by Rentals.ca and Urbanation found that when compared with the pandemic lows they hit in April, 2021, rents for condos and purpose-built apartments recorded their largest increases in Vancouver, up 47 per cent, followed by Toronto, up 41 per cent.
The National Rent Report – which measured the overall Canadian rental market between April, 2021 and April, 2023 using listings from the Rentals.ca network – showed average monthly rent has jumped by $340 in that period. Year over year, national average rents were up 9.6 per cent since April, 2022, the report finds.
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Canada’s smaller urban centres also saw a notable surge in numbers. In April, Ottawa rents climbed 15-per-cent year over year, while Edmonton saw an 11.8-per-cent climb and Montreal logged a 10.7-per-cent increase.
“Virtually every area in Canada is experiencing an increase,” Urbanation president Shaun Hildebrand said in an interview. “Fundamentally, this comes down to the housing supply but also the shock in interest rates and high housing costs that impact generational affordability.”
Year over year, Ontario saw the biggest jump in monthly rent prices in April with a 29-per-cent increase, while British Columbia trailed closely behind with a 28-per-cent bump.
Among Canada’s biggest cities, Calgary recorded the highest year-over-year monthly rent increase at 22.9 per cent. Canada’s most expensive city, Vancouver, led the way in terms of the highest average monthly rent with one-bedroom units across condo rentals and apartments going for $2,787 and two-bedroom homes listing at $3,741 – a year-over-year climb of 16.8 per cent. In Toronto, that growth was 21.2 per cent, with average rents for condo rentals and apartments sitting at $2,822.
The report found Oakville, Ont., to be the most expensive medium-sized rental market, with average monthly prices for condo rentals and apartments sitting at $3,413. Trailing closely behind in this category were Burnaby, B.C., at $2,894, and neighbouring Coquitlam as well as Richmond, both with average rents above $2,700. Outside of Ontario and B.C., Halifax was the only medium-sized town to make the top 25 list of cities with the most expensive average rent at $1,999.
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Rising interest rates and high housing prices have expanded the pool of higher-earning renters, according to Mr. Hildebrand. Furthermore, record immigration levels are driving some of the latest rental increases by growing the pool of renters.
“Housing affordability has eroded significantly – those who would’ve otherwise bought a house are not,” he said, pointing to Bank of Canada’s interest-rate hikes. “And these people waiting to buy houses are able to afford a higher rent, bid higher on rental properties, and bid out the lower-income people.”
According to Mr. Hildebrand, immigrants will among those hit hardest by soaring rents. Scarborough, Brampton, and Markham – which have high levels of immigration – are three Toronto area suburbs with rent prices that grew more than 30-per-cent year over year, the report finds.
“There’s also a direct correlation between rent inflation and immigration because a lot of immigrants rent when they first come,” Mr. Hildebrand said. “But ultimately, the demand side will always continue to grow – we need the supply side to catch up.”
That’s something he doesn’t see happening any time soon, however: “Rental developers are dealing with high costs so purpose-built rental supply is going down, especially in places like Toronto. It’s not until rents are even higher before we begin to see more being built.”
But Douglas Kwan, director of advocacy and legal services at The Advocacy Centre for Tenants Ontario (ACTO), doesn’t believe that boosting rental supply will solve the problem.
“Rising rents have impacted seniors, families, and racialized Canadians the most – it’s an income issue, so rental support is essential,” he said. “Whether it’s a housing benefit from the government, strong rent control, or raising the minimum wage – every level of government has a part to play in solving this crisis.”
For the moment, Mr. Hildebrand and Mr. Kwan agree that rent prices will only continue to surge until the government steps in.
“We need to speed up the development process, reduce costs, provide some sort of incentives – they should prioritize rental housing,” Mr. Hildebrand said. Until then, ”we’re not going to see a lot of reprieve in terms of rental affordability.”