The average asking rent for all Canadian properties listed on Rentals.ca in March was $1,685 per month, down $157 or 8.5 per cent from $1,842 in March of last year.
Since hitting a high of $1,954 in August 2019, the average monthly rental rate has steadily declined — now down $269 from the peak and down $29 from February, according to Rentals.ca’s and Bullpen Research & Consulting’s latest National Rent Report.
At the one-year mark of the COVID-19 pandemic, Canada has experienced the biggest housing shake-up in its history.
With few immigrants crossing the border, few students moving close to school, and few recent graduates moving closer to their first jobs, demand has fallen dramatically. Adding to lower demand is a feverish resale housing market brought on by low borrowing costs, the desire for more space, and the uncoupling of many workers to the location of their employer’s office.
But some signs are pointing to a rental market that is hitting bottom. The average rent in Vancouver, Toronto and Montreal increased in March over February this year. Median rent levels by bedroom type show that studios, two-bedroom, three-bedroom and four-bedroom properties have all increased year over year, suggesting that outliers have had a big impact on the averages, and the market might look a little different from what some of the data suggests.
As the work-from-home phenomenon persists, renters continue to look for larger units for a home office, which has resulted in more smaller units being listed on Rentals.ca pulling the average rent down. Anecdotal evidence from leasing agents suggests that rental demand could be increasing in the downtown areas of Canada’s major cities, as tenants look to get in at the bottom before rents rise in conjunction with the rise in vaccine distribution.
“We have seen a clear shift in the composition of units on Rentals.ca prior to COVID and in early 2021,” said Matt Danison, CEO of Rentals.ca. “There are fewer large units and single-family homes for rent, and many more tiny condominium suites, as tenants look for larger units to work from home. This shift is having a meaningful impact on the data, as the rent per square foot is actually higher in March of this year versus March 2020.”
Vancouver remains the most expensive city for renters looking for one- and two-bedroom homes on the list of 35 cities with average monthly rents at $1,932 and $2,598 respectively.
Toronto finished second with average monthly rent for a one-bedroom home in March at $1,810, and average monthly rent for a two-bedroom home at $2,370.
Four of the five largest cities in Canada experienced year-over-year rent declines in average rent for all property types in March. Only Calgary saw an increase, and that was a small 1.8 per cent increase.
Toronto had a dramatic decline of 18.7 per cent; followed by Vancouver at 8.8 per cent; Edmonton at 6.6 per cent; and Montreal at 4.4 per cent.
But Toronto, Montreal and Vancouver all had slight increases in average monthly rent for all property types in March over February. Toronto had seen average rents decline in every month in 2020, as well as January and February of this year. Montreal’s average rent increased month over month for the first time since July 2020.
“Despite the drop in rent on a national level, there are signs that the rental market has bottomed out, with monthly rent increases in Vancouver, Toronto and Montreal,” said Ben Myers, president of Bullpen Research & Consulting. “With the likelihood that downtown offices will reopen within the next year, it is clear that some tenants are taking advantage of the lower rents and greater choice to secure a better location or bigger unit than they had prior to the pandemic.”
Vancouver and Toronto had the highest average monthly rent in March for condominium rentals and apartments out of 24 municipalities and former municipalities with the most listings on Rentals.ca.
The average rent was down by $467 annually to $1,987 in Toronto in March (-19 per cent), compared to $2,454 in March 2020 and $2,417 in 2019. Vancouver rent, at $2,165, was down from $2,381 in March 2020 (-9 per cent annually) and $2,393 in March 2019.
Average monthly rent for condo rentals and apartments was also down annually in Ottawa, Montreal, Edmonton and Quebec City.
Average monthly rents were also down in these GTA cities and areas: Mississauga, North York, Etobicoke, Markham, Scarborough and Richmond Hill.
Kitchener, Halifax, London, Calgary, and Winnipeg all had annual increases, while Saskatoon remained the same in comparison to March of 2020.
On a provincial level, British Columbia remained on top, edging out Ontario for the highest national rental rate in March at $1,915 per month on average for all property types. At $1,905, Ontario’s rental rate was second highest, while Newfoundland and Labrador was the lowest at $934.
Ontario experienced the highest annual decrease of 15.1 per cent, a $339 difference from March of 2020. British Columbia, Alberta, Saskatchewan, Northwest Territories, Ontario and Quebec all decreased yearly. Newfoundland (5.4 per cent), Manitoba (2.9 per cent) and Saskatchewan (0.9 per cent) were the only provinces to see increased year-over-year average rent.
Comparing the median rents for Q1-2021 to Q1-2020, all bedroom types experienced a slight increase in median rent except units with one bedroom. Studio units experienced an annual increase of 8.4 per cent ($101 per month); two-bedroom units saw an increase of 0.3 per cent ($6 per month); three-bedroom units experienced an increase of 2.4 per cent ($50 per month); and four-bedroom units saw an increase of 3.7 per cent ($97 per month). One-bedroom units, on the other hand, saw a median rent decrease annually by 6.1 per cent ($100 per month).
One of the factors influencing the median rent is tenants’ preference for larger suites with renters looking for space for an office or space to accommodate virtual learning. This can result in smaller units remaining on the market longer, and the share of one-bedroom suites growing as a percentage of total listings.