Rents in Canada increased 9% in 2023 to record high
According to the Rentals.ca January 2024 Rental Report, average asking rents for all residential property types in Canada reached a record high of $2,178 at the end of 2023. This number represents an increase of 8.6% from the end of 2022 ($2,005).
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Over the past two years, asking rents in Canada have increased by a total of 22%, or an average of $390 per month.
The 8.6% increase in rent in 2023 follows a 12.1% increase in 2022 and 4.6% increase in 2021. The latest five-year average annual increase in rent was 4.9%.
Apartment rents saw fastest growth in 2023
Apartments had the lowest average rents in Canada at $2,076 but experienced the fasted growth of the past year with a 12.8% increase. Compare this to the average rent of $2,340 for condominium rentals and $2,354 for home rentals, which experienced relative slower growth in 2023 of 6.9% and 5.9% respectively.
One-bedroom apartments grew 13% in 2023
The rent prices for one-bedroom apartments in Canada increased 12.7% over the past year, reaching an average price of $1,932. Studio rent growth followed closely behind at 11.9% growth, with rents averaging $1,552.
Rents for two-bedroom apartments averaged $2,301, increasing 9.8% year over year. Two-bedroom rents increased at a slower rate in 2023 compared to 2022, while all over unit types experienced faster rent growth in 2023.
Provincial and municipal overview of rent prices in 2023
Alberta was the province with the fastest growing rents for condominiums and apartments in 2023, with a 15.6% annual increase in December, reaching an average price of $1,691. This came after a 16.8% increase in Alberta rent in 2022.
Calgary and Edmonton had the highest rent growth among major cities in Canada, with rents rising 14% and 13.5%, respectively.
British Columbia maintained its position as the most expensive province to rent, with an average asking rent price of $2,500, despite recording a 1.4% decrease in rent prices compared to 2022. This followed an 18.5% increase in British Columbia rent prices during 2022.
Renting an apartment in Ontario was on average slightly less than British Columbia at $2,446, increasing 3.7% in 2023.
After experiencing extreme rent increases of 20% in 2022, Vancouver and Toronto’s rent increases slowed considerably in 2023.
Quebec was the only province to experience faster rent growth for apartments in 2023 compared to 2022 (10% vs. 6.9%), raising rents to an average of $1,953 in December. Montreal was the city with the third highest rent growth of 11.3%, with apartment rentals averaging $2,019.
Nova Scotia saw apartment rent prices decrease 2.4% to an average of $2,129. This comes after a massive 31.4% surge in rent prices that occurred in 2022 when the province experienced a sharp rise in population and a higher priced rental supply.
Looking forward to 2024
According to the Rental Report, the Canadian rental market should remain undersupplied but should become more balanced in 2024, with rent growth expected to get closer to the five-year average of approximately 5%.
In addition, a continued increase in apartment construction and tenant turnover is expected for 2024 and should add more supply to the market and help slow price growth.
Finally, relatively affordable markets, such as those in Alberta, should continue to experience above average increases in rent prices, while more expensive markets, such as those in BC and Ontario, should continue to experience rent increases that fall below the national average.
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