Canada’s rental market has seen a national cost decrease for the first time in over three years, driven by new rental supply and slower population growth.
The 1.2% annual decrease brings average asking rents for all residential property types in Canada to $2,152 a month. Average rents for houses or townhouses decreased 5.3%, followed by condos which saw a 3.8% decrease, and apartments, which saw a 1.7% increase.
Rent decreases were most notable in Canada’s most expensive provinces, like Ontario and British Columbia, which saw 6% and 3% decreases, respectively. Conversely, Canada’s least expensive provinces saw rent increases, led by Saskatchewan with a 17% rise.
Associate Director of Communications for Rentals.ca, Giacomo Ladas, told True North that the national rent decrease can be attributed to three factors. Firstly, he said that new completions have reached their highest level in decades. Also, he said that population growth has slowed notably and played a large factor, especially with international students.
A previous Desjardins report highlighted that only one in ten university students were able to access a residence bed. An estimated 1.2 million students were renting in communities outside of the institutions, while the number of international students living in “unsuitable housing” ranged from 25% to 63%.
He also said that the affordability crisis has played a role, as the labour market has softened, wages have stagnated, and inflation remains high, rents have subsequently moderated.
“Interprovincial migration is still here, and people are just moving out of Ontario and British Columbia in search of more affordable rents across the country,” said Ladas.
He added that major cities which generally host more international students have seen larger decreases, notably Vancouver and Toronto which are key international destinations.
The previous month’s decrease was also attributed to fewer international students.
Interprovincial migration affecting rent decreases in the most expensive areas and increases in the cheapest are nothing new either.
Ladas previously touted Saskatchewan as “the last-ditch effort of affordable living in Canada,” a trend which he said is continuing.
While Oct. was the first decrease since July 2021, average asking rent for all property types has been steadily decreasing since May 2024, which saw a 9.3% increase.
The rate of increase slowed each month from May to Oct., dropping from 9.3% in May to 7.0% in June, 5.9% in July, 3.3% in Aug., and 2.1% in Sep., before reaching -1.2% in Oct.
Ladas said that May is usually when prices skyrocket.
He said that further softening is expected over the winter months, which would be par for the course. However, he expects demand, and therefore cost, to skyrocket next spring.
Ladas added that interest rate cuts have played a role, allowing more people to stop renting and purchase their own place. Even more importantly, he said the cuts have made it cheaper for developers to build purpose-built rentals.
Across the country, shared accommodation listings saw a 12% monthly and 58% yearly increase.
“October was marked by an outsized increase in shared room rentals primarily in single-family homes,” reads the report.
Ladas said that the listing and demand for two and three bedroom apartments has surged on Rentals.ca. He attributes the increase to the fact that people are expecting to live in and rent these apartments for a longer period of time because they don’t expect homeownership to be a possibility in the near future.