The average monthly cost of renting a home in Canada surpassed $2,000 for the first time ever in November, according to a report released Wednesday.
The data shows that Canadian renters are dishing out an average of $2,024 every month to keep a roof over their heads. The figure covers all types of housing from bachelor apartments to detached homes.
That’s up 12.4 per cent over last November, far outpacing Canada’s inflation rate of 6.9 per cent.
The new report was published by the rental search site Rentals.ca and Urbanation, a real estate research firm. It relies on data compiled from Rentals.ca’s internal listings service and highlights that the price of renting is surging in almost every market in the country.
The costs of one and two bedroom units were highest in Vancouver at $2,633 per month and $3,598 per month, respectively.
Toronto had the second-highest rents. The average price of a one-bedroom apartment in the city has jumped 23 per cent since the same time last year, standing at $2,532 monthly. A two-bedroom apartment will cost you an average of $3,347 per month, the report found.
Other cities in the Greater Toronto Area saw major increases in rent as well. Costs in Brampton climbed 28 per cent year over year, while Mississauga saw a 19.2 per cent jump. Smaller markets west of the GTA also got more expensive, with monthly rents rising 27.9 per cent in London and 24 per cent in Kitchener.
Of the 20 Canadian cities with the most expensive average rents all but one — Halifax — were in B.C. and Ontario. The biggest year-over-year increase for a single bedroom unit was seen in Burnaby, B.C., where renters paid a stark 32 per cent more last month than they did in November 2021.
Average rents in Canada skyrocket to nearly $2,000/month
The average rent price in Canada has increased to nearly $2,000 a month according to Rentals.ca, leaving renters scrambling to find an affordable place to live while higher mortgage rates are forcing some landlords to make tough decisions.
Increases in rental costs show no signs of slowing down, the report noted. Year-over-year jumps have been in the double digits since May, with November’s being the highest yet.
“Rents in Canada are rising at an exceptionally high speed, which is having a profound effect on housing affordability as interest rates continue to rise,” said Shaun Hildebrand, president of Urbanation, in a news release on the findings.
“With the most expensive cities experiencing very low supply and the fastest rates of rent increase, regions with high population growth are seeing demand shift into more affordable areas.”
When it comes to purpose-built rental apartments and condos only, Atlantic Canada actually saw the fastest annual rate of increases in rental costs with a combined 31.8 per cent growth year over year for Nova Scotia, Newfoundland and Labrador, New Brunswick and P.E.I.
One-bedroom units in Atlantic Canada averaged $1,716 per month in November, while two-bedroom units cost an average of $2,032, according to the report.
Conversely, Montreal — Canada’s single largest rental market, according to the report — saw the slowest growth in rent increases at just 7.6 per cent.
Soaring prices leaving some renters priced out
While the housing market may be cooling down, the rental market is on fire, with the price of an average unit up 10 per cent compared to last year. That has left many renters scrambling to find suitable housing.
Skyrocketing rental costs come as higher interest rates have cooled housing markets throughout the country. Normally a slowing real estate market would be good news for renters since landlords may be eager to find reliable tenants — but the issue boils down to supply and demand.
“Interest rates are actually working to elevate rent inflation because many people are not buying, so they are renting more,” CIBC economist Benjamin Tal told CBC News last month.
Compounding the problem is that the high costs of borrowing means builders are cancelling developments and investors are hesitant to pour money into future real estate projects.
“Higher interest rates reduce the incentive to invest in real estate, especially in the condo space,” Tal said. “So if you don’t have those units, that’s another factor driving up the cost of renting what’s left.”
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