Average rent for all Canadian property types listed on Rentals.ca was $1,934 in July, an increase of 10.4 per cent year over year, according to the Rentals.ca and Bullpen Research & Consulting latest National Rent Report.
The July average rent in Canada is now only $20 below the pre-pandemic peak of $1,954 in September 2019. The market had fallen 14.3 per cent from the peak to $1,675 in April 2021, but has since increased by 15.5 per cent. Month over month, average rents rose 2.6 per cent over June.
The median rental rate was $1,799 per month in July, up from $1,750 in June, and up 9 per cent from the $1,649 per month in July of last year.
Workers returning to the office are boosting rents in the most expensive central markets in Canada.
Rising interest rates are hitting potential homebuyers with a double whammy of higher mortgage rates, along with the worry of future price declines devaluing their investment.
Higher interest rates are also keeping would-be home sellers from listing their properties, which ultimately leads to higher demand in the rental market.
Immigration remains elevated, and the unemployment rate nationwide remains near historic lows, so despite some recession fears, rental market demand remains strong.
“The 2.6 per cent monthly increase in average rents in Canada is the second highest monthly jump in three years, topped only by the 3.8 per cent rise in May 2022,” said Ben Myers, president of Bullpen Research & Consulting. “Rents were boosted by rent growth of 20 per cent and higher in several major municipalities in Canada, and double-digit growth in a number of the most affordable rental markets, such as Red Deer and Saskatoon.”
On a list of 18 cities, Victoria average rents had the highest year-over-year increase of 27 per cent for all property types in July at $2,667 over $2,093 in July 2021 – and the July 2021 number rose 15 per cent over the previous year.
Hamilton average rents were up 26 per cent year over year in July for all property types to $2,097, after being down 13 per cent in July 2021 to $1,664.
Kitchener came in third with an increase of 25 per cent year over year in July to $2,108.
Burnaby, Toronto and London average rents all rose 24 per cent year over year in July to $2,680, $2,691 and $2,036 respectively. London rents also rose in July 2021 by 9 per cent.
Mississauga, Calgary, Vancouver and Red Deer all had double-digit rent increases year over year in July by 19 per cent, 18 per cent 16 per cent and 13 per cent respectively. Calgary average rents were up 13 per cent year over year in July 2021, while Vancouver average rents rose 16 per cent year over year.
Halifax, Kingston and Saskatoon average rents all increased 11 per cent year over year in July. Halifax average rents were up 22 per cent year over year in July 2021, and Kingston average rents rose 19 per cent in July 2021.
Of the 18 municipalities, only Winnipeg average rents declined year over year in July for all property types by 1 per cent to $1,377, but they were up 13 per cent year over year in July 2021 to $1,385 per month in July 2021.
Vancouver once again tops the list of 35 cities for average monthly rent. In July, average monthly rent in the city for a one-bedroom home was $2,500, and average monthly rent for a two-bedroom was $3,630.
Year over year, average monthly rent in July for a one-bedroom in Vancouver was up 14.4 per cent and up 19.4 per cent for a two-bedroom. Month over month, average rent in Vancouver was up 3.6 per cent for a one-bedroom and up 4.8 per cent for a two-bedroom.
Toronto finished fourth on the list of 35 cities for average monthly rent in July for a one-bedroom at $2,257 and second for average monthly rent for a two-bedroom at $3,259.
Year over year, average monthly rent in July for a one-bedroom in Toronto was up 21.6 per cent and up 25 per cent for a two-bedroom. Month over month, average rent in Toronto was up 4 per cent for a one-bedroom and up 7.8 per cent for a two-bedroom.
Montreal came in 24th for average monthly rent in July for a one-bedroom home at $1,543 and for 22nd average monthly rent for a two-bedroom at $1,958.
Year over year, average monthly rent in July for a one-bedroom in Montreal was up 8.9 per cent and up 5.7 per cent for a two-bedroom.
On a provincial level, British Columbia had the highest average rents in July at $2,590 per month for all property types, up 19 per cent year over year.
Ontario had the second highest average rents in July at $2,332 per month, an increase of 15.2 per cent annually.
Nova Scotia had the third highest average rent in July of the seven provinces in July at $2,222, but that’s a whopping 25 per cent increase year over year.
Manitoba was the only province with a year-over-year decrease in average rent in July, but it was only by $3 to $1,377 from $1,380 in July 2021.
With higher home prices, and higher interest rates helping to increase demand in the rental market, some investors are seeing this as an opportunity to rent out more single-family properties.
Despite worries of large corporations buying many single-family houses to rent, less than 6 per cent of all rental properties listed on Rentals.ca are single-family dwellings, up from 2021, but virtually unchanged from 2020.
But record-high rents for single-family homes in 2022 will attract more investors if house prices in the resale market continue to decline.
Through the first seven months of the year, Vancouver, Toronto, Ottawa, Calgary and Edmonton all have had higher rents in 2022 than in 2021, 2020 or 2019 for single-family houses.
Vancouver single-family rents are up 37 per cent in 2022 over 2021, and 32 per cent over the 2019 average. Toronto single-family rents are up 19 per cent annually, with the year-to-date 2022 average up 7 per cent over the 2019 figure. In Ottawa this year, single-family homes have seen rents increase 7 per cent annually and 17 per cent since 2019.