The latest figures show that rent increases in Canada’s most affordable provinces, such as Saskatchewan and Alberta, are outpacing growth in the country’s traditionally expensive markets like British Columbia and Ontario.
This is according to Rentals.ca and Urbanation’s September 2024 Rent Report.
Giacomo Ladas, the associate director of communications for Rentals.ca, told True North that while it may seem counterintuitive, the provinces with the most expensive rents are seeing decreases while the cheapest provinces are seeing the opposite. He added that secondary markets near costly metropolitan areas, like Burnaby and Mississauga, are also seeing decreases.
The same report released in February showed Alberta leading the way in rent increases.
“Saskatchewan is kind of becoming the new version of Alberta. We’re calling it the last-ditch effort of affordable living in Canada. Asking rents in Saskatchewan are a third of the price in places like Vancouver. If you don’t have to live in a metropolitan core to work anymore, and you can work from home, then Saskatchewan looks pretty great,” said Ladas.
While Saskatchewan recorded a 21% year-over-year increase in rents, followed by Alberta with an increase of 11%, British Columbia and Ontario, the provinces with the highest rents, experienced declines of 5% and 4%, respectively. This trend of rising rent in lower-cost provinces has been driven by interprovincial migration and a growing demand for affordable housing options.
The average asking rent across Canada was $2,187 in Aug., increasing 3.3% year-over-year, the slowest yearly increase seen in nearly three years. The increase was suppressed by a decrease of 0.1% on a month-over-month basis.
President of Urbanation Shaun Hildebrand applauded the rental increase coming back down to earth in a press release provided to True North.
“Rent increases in Canada finally returned to their longer-term average after nearly three years of excessive growth,” said Hildebrand. “This was achieved through a combination of more supply being built, as well as a rollback in demand from population-related changes in government policies.”
Ladas said that three factors affect national rent prices.
“Apartment completions have reached our highest totals that we’ve seen in decades. I don’t know how much that’s saying because the market has been so undersupplied for decades now,” said Ladas. “There’s been a recent slowdown in population growth and there’s been a relative softening in the labour market. Typically, when those three things happen, we start to see a little bit of softening in the asking rents nationally.
The population growth softening can be attributed to Prime Minister Justin Trudeau recently backtracking on some of his mass immigration policies, cutting the permanent resident numbers and the temporary foreign workers program. The announcement of those cuts followed the Liberals implementing a two-year cap on international students, which aims to reduce the number by 35%.
The difference in rent increase between the most expensive province, Ontario, and the least expensive, Saskatchewan, was 25%.
“Seeing a 25% swing from province to province across Canada, it’s quite large. It’s really showing that it’s not just a national story but a kind of provincial one as well, as there seems to be more of a levelling out not only between metropolitan areas but provinces as well,” said Ladas.
He added that people are drawn to places like Winnipeg, where they can find one-bedroom apartments to rent for $1,300 a month.
Meanwhile, larger urban centres like Vancouver and Toronto are seeing declines in rental demand. Vancouver’s rents dropped by 6%, marking the ninth consecutive month of decline, while Toronto’s fell by 6.9%, bringing the average rent in the city down to $2,697.
Ladas added that historically, Rentals.ca has seen 50-60% of its listings be one-bedrooms. The number has since dropped to 35-40%, which he attributes to people seeking roommates to mitigate costs, lower turnover rates from long-term renters, and more people working from home requiring a home office, all causes for Canadians to swap from renting one-bedrooms to two and three-bedrooms.