Canada’s Average Monthly Rental Price Set New Record in August: Report

Rental properties are shown in Calgary, Alta., March 12, 2019. (The Canadian Press/Jeff McIntosh

The average price of a residential rental property in Canada reached a record $2,117 in August led by growth in Alberta, according to a new report.

Alberta’s rapid rental appreciation—it increased by 15.6 percent annually to $1,634 last month—correlates to record population growth in Canada, says the report from Rentals.ca.

Although Alberta doesn’t have rent control laws, inter-provincial migration particularly from British Columbia and Ontario—where average rents reached $2,675 and$2,496, respectively—has played a major role in rental appreciation.

Calgary, in particular, led all Canadian cities in rental appreciation last month with the average monthly asking price growing by 17.3 percent year-over-year to $2,068.

“Despite rental apartment completions in Canada over the past 12 months reaching their highest level since the 1970s, rent growth has remained exceptionally strong,” said the report, noting appreciation was 9.6 percent higher than in August 2022.

“This can be attributed to the country’s record-high population growth and sharp deterioration in homeownership affordability.”

A Canada Mortgage and Housing Corporation (CMHC) report anticipates slower economic growth in the coming years, which would obstruct movement in the housing market. CMHC projected that with less money to buy homes, more Canadians would stay in the rental market longer, which could inflame low vacancy rates in key markets like Toronto, Montreal, and Vancouver.

However, the confluence of chronically undersupplied housing inventory, in both the homeownership and rental markets and brisk population growth is putting upward pressure on pricing.

A May 2021 report from Scotiabank noted that Canada produces the fewest units of housing per capita among its G7 peers and that production had been declining for years while the country’s population had been growing.

“Canada experienced an immigration-fuelled population boom since 2015 that saw population rise much more rapidly than new housing units were built,” Scotiabank’s report said.

Rentals.ca’s report was released on the same day the Liberals announced a $74 million deal with the London, Ont., municipal government to expedite the development of more than 2,000 new homes in the next three years. The deal is part of the Liberals’ Housing Accelerator Fund, which will establish similar pacts with other municipalities across the country in a bid to grow housing supply.