2024 saw average rents fall in Canada for the first time since the COVID-19 pandemic began in 2020, when rents fell 5.4 per cent, with Toronto seeing a 7.1 per cent decrease, a national rent report shows.
In December, the average asking rent for all residential property types in Canada hit a 17-month low, falling by 3.2 per cent from last year to $2,109.
Although this marks the first decline after rent growth of 8.6 per cent in 2023 and 12.1 per cent in 2022, rents are still 16.8 per cent higher than five years ago, averaging 3.15 per cent annually, according to a report from Rentals.ca and Urbanation.
The rental market cooled across most parts of the country in 2024, with the slowdown driven by a surge in apartment completions, slower population growth and a weakening economy, said Shaun Hildebrand, president of Urbanation in the report.
“Current trends suggest rents may experience further decreases in 2025, which so far have been focused on secondary market units,” Hildebrand continued.
But he warned that these reductions are unlikely to last or be significant due to a persistent shortage of rental units in the country. Rents are expected to rise again in the coming years as the current slowdown in construction will further restrict the supply of available rental properties.
In Ontario, rents saw the sharpest provincial drop — driven by decreases in one- and two-bedroom units — falling by 4.7 per cent annually to an average of $2,332. Rents in Toronto decreased by 7.1 per cent to $2,632, reversing the 2.1 per cent increase recorded in 2023.
The dip in prices was observed in other municipalities in the GTA as well including Oakville, Mississauga and Brampton, according to Toronto Regional Real Estate Board data. It was driven by an influx of new housing supply last year, with a near-record number of new purpose-built rental units competing with condo completions, as previously reported by the Star.
Rents are also trending downward in other major Canadian cities with Vancouver experiencing a 5.8 per cent drop to $2,882 and Calgary seeing a 7.2 per cent decrease to $1,921.
However, Quebec City stands as an exception, emerging as the fastest-growing rental market in 2024, with average rents rising by 14.9 per cent year-over-year in December.
When it comes to the type of units, townhouse and house rentals saw the steepest decrease, falling by 7.4 per cent to $2,181 while purpose-built rentals remained stable across Canada, with a slight 0.3 per cent decline in average rents to $2,070.
Studios were the only unit type to see rent growth, with prices rising 1.7 per cent to $1,591. Meanwhile, rents for one- and two-bedroom units fell by 1.1 per cent and 0.3 per cent, respectively.
