A month after seeing its slowest rate of growth in three years, average asking rents across Canada for all property types saw their first annual decrease since 2021 in October.
But that doesn’t mean all places saw the same drops — and while the national average went down, some places still saw local jumps.
According to the latest Rentals.ca and Urbanation report, the rate dropped by 1.2 per cent compared to October 2023, with the average rent hitting $2,152 per month down from $2,193 in September.
“It’s been a long-time coming,” Giacomo Ladas, associate director of communications for Rentals.ca, said in an interview.
The decline is being driven by drops in larger cities, especially in B.C. and Ontario with Vancouver seeing a drop of about 9.1 per cent year-over-year on a one bedroom, with Toronto dropping by 8.7 per cent.
According to Ladas, more housing supply to keep up with demand, a slowdown in international student growth causing fewer renters, and a softening in the labour market prompting Canadians to not move to the bigger cities are all contributing to the drop.
Even with these decreases in the big cities of Ontario and B.C. bringing down the national average rents, the report notes rental growth in the other provinces.
Saskatchewan, for example, lead the increases with an annual rise of 17.1 per cent, amounting to an average of $1,358, while rent in Nova Scotia was up by 9.6 per cent compared to 2023.
The cost in the Prairie province may seem appealing compared to $2,350 in Ontario, but Ladas cautioned the increased demand for more affordable rent is causing those lower costs to rise.
“Saskatoon is much more affordable than the national average and much more affordable than some of these other major cities, that is going to be a draw,” he said. “But however, you live in Regina, you live in Saskatoon, you live in Winnipeg, a lot of the times for the decreased cost of living … So when rent is going up 15, 16 per cent, it’s hard to tell someone who lives in that city, ‘Well, don’t worry, you’re still below the national average.'”
Though the national average saw a drop, a look closer at the report shows apartments actually saw average rent rise by 1.7 per cent, with condo and house or townhouse rentals actually driving much of the decline. Condo rentals, for example, decreased by 3.8 per cent on average, with a rental in a house dropping by 5.3 per cent.
When it came to bedroom types, condo studios were one of the biggest drops in Canada, with rent sitting at about $1,874 on average though one bedrooms also saw a decline to about $2,057.
A big factor is once again demand, with Ladas noting the big influx in condo developments when interest rates were low created more supply. But with rates now much higher, those condos that are available aren’t selling prompting developers to rent them out as a way to recoup their losses.
“Some of the time they’re actually listing it at a more competitive price in order to move these units,” he said. “So you might actually be able to see some condos for rent, mostly bigger units, that are actually priced to move because they were meant to sell.”
When it comes to whether this trend will continue, it may depend on factors such as how far interest rates will continue to drop, but also what the results of the next federal election could have on housing.
“Whoever comes out of the other side, typically lot of new policies come into the country,” Ladas said. “That usually brings some sort of change whether people have more money in their pockets or there’s more infrastructure coming in to develop.”