Canadian asking rents fall 4.2%, extending declines to two years

Canadian asking rents recorded their 24th consecutive year-over-year decline in September, but the latest report from Rentals.ca and Urbanation suggests the downturn may be easing in Toronto and Vancouver.

Average asking rents across all residential property types were $2,034, down 4.2% from a year earlier and 7.3% over two years. That brought rents to their lowest September level since 2022.

The annual decline narrowed from 4.8% in August, while rents slipped just $1 month-over-month. The report attributed the second consecutive monthly decrease to the usual slowdown after the summer leasing season.

Urbanation president Shaun Hildebrand said supply has driven the longer correction, but that pressure is starting to ease in the country’s two largest rental markets.

“Two straight years of falling rents is the longest downturn the Canadian rental market has seen in recent history. Our research shows supply has been the main driver of this correction, and in key markets like Toronto and Vancouver, new supply is moving past its peak,” he said in a release.

“Rents in both cities have trended higher over the past six months, and annual declines have narrowed significantly as renters come off the sidelines. Where Toronto and Vancouver go, the rest of the country follows.”

Condo rentals continued to see the steepest declines, with asking rents down 7.8% year-over-year to $2,052. Purpose-built apartment rents fell 2.7% to $2,036, while houses, townhomes and other secondary-market rentals dropped 7.4% to $2,016.

Within the condo market, studio rents fell 9.6% and two-bedroom rents declined 8.7%. Larger purpose-built apartments held up better, with three-bedroom rents down just 1.4%.

Toronto and Vancouver show signs of stabilizing

Vancouver apartment and condo rents rose 1.4% from August to $2,741, the strongest monthly gain among Canada’s six largest rental markets.

Its annual decline narrowed to 1.3% from 4.1% in August, the smallest decrease since December 2023. Even so, Vancouver recorded its 34th consecutive month of annual declines.

Toronto rents slipped 0.6% to $2,554, a second monthly decrease after four months of increases. Rents were down 1.4% year-over-year, extending the city’s annual declines to 32 months.

Both cities recorded their lowest September asking rents since 2021.

The report said construction inventory has peaked in Toronto and Vancouver. Lower rents and move-in incentives are also encouraging people who had delayed leaving their parents’ homes or shared accommodations to enter the market.

Calgary and Edmonton saw the largest annual apartment and condo rent declines among the six major markets, at 3.9% and 3.2%, respectively. Ottawa rents fell 1.2% and Montreal rents declined 1.1%.

Provincially, apartment and condo rents fell most sharply in Ontario, down 3.7%, followed by Manitoba and Alberta, both down 3.4%. Nova Scotia and Saskatchewan were the only provinces tracked to post increases, at 1.2% and 0.4%.

Despite the correction, national asking rents remained 16.2% above their September 2021 level.

The report tracks asking rents for available listings, rather than what existing tenants pay. Changes in the mix of advertised properties can also affect the averages.