The soaring prices that Canadian renters often face have reached unprecedented levels in the country’s history, marking a significant milestone in the housing market. Data unveiled this week by Rentals.ca and research firm Urbanation reveal that the average asking rent for July surged to $2,078, a remarkable climb of nearly nine percent compared to the same month last year.
These figures not only represent the fastest three-month growth rate on record but also demonstrate a 1.8 percent month-over-month surge between June and July, marking the most rapid increase in the past eight months.
Compared to July 2021, the average asking rent has skyrocketed by 21 percent, translating to an additional $354 per month on average for renters.
The driving forces behind this surge in rental costs are multifaceted. A surge in post-secondary students securing leases before the fall term, coupled with unprecedented population growth and potential homebuyers delaying purchases due to rising interest rates, have collectively contributed to this challenging scenario.
Shaun Hildebrand, President of Urbanation, emphasized, “Canada’s rental market is currently facing a perfect storm of factors driving rents to new highs… [including] the worst ever home ownership affordability conditions.”
The impact of successive interest rate hikes on potential homebuyers has been substantial, causing some to withdraw from the housing market. With the average home price reaching $709,218 in June, up 6.7 percent from the previous year, housing affordability has become a pressing concern.
As prospective homebuyers grapple with high property prices, many are turning to the rental market for housing options. However, relief remains elusive there as well.
In an unprecedented development, average asking rents for purpose-built condominiums and apartments crossed the $2,000 threshold in July, reaching an average of $2,008, according to Rentals.ca and Urbanation’s research. One-bedroom apartments experienced a staggering 13 percent annual increase and a 2.5 percent monthly rise, culminating in an average of $1,850 for July.
The demand for rental properties has led to distinct increases in asking rents for roommate accommodations. Across British Columbia, Alberta, Ontario, and Quebec, the average asking rent for such arrangements surged by an average of 16 percent over the past year, reaching $971.
Vancouver and Toronto emerged as the leaders in average asking rents for roommate rentals, with rents settling at $1,455 and $1,296, respectively. Amidst these escalating rental costs, the Canadian rental landscape is navigating unprecedented challenges, compelling both renters and policymakers to grapple with the mounting affordability crisis.