Canadian rents are showing the first sign of weakness since the pandemic kicked off. A new report from Urbanation & rentals.ca shows the average rental price fell to $2,151 per month in October, down 1.2% since last year. It was the first year-over-year (y/y) drop since July 2021, with the 3-month trend showing annual growth has plunged 2.2% lower. This implies the downtrend is picking up steam, especially in BC and Ontario, where big cities lead the country for 1-bedroom price declines.
BC Cities Saw Rental Prices Fall Fastest, Including Vancouver
British Columbia (BC) rents are notoriously expensive but several of its big cities are leading the way lower. Vancouver saw its 1-bedroom asking price fall to $2,610/month in October, shedding 9.1% from last year. It was the second largest 12-month decline of any city measured, only surpassed by another BC city—Burnaby.
In Burnaby, the average 1-bedroom asking price fell to $2,398/month, down 9.4% from last year. The month saw a 3.8% drop over just the 31 day period, making up more than a third of the annual change. An incredibly fast sentiment shift, to say the least.
Canadian 1-Bedroom Monthly Asking Price
The monthly listed price to rent a 1-bedroom in October 2024 in major Canadian real estate markets.
Source: Rentals.ca; Urbanation; Better Dwelling.
Greater Toronto Cities Saw Rents Plunge Almost As Fast As BC
Ontario 1-bedroom asking rents were also plunging, especially around Greater Toronto. The City of Toronto saw 1-bedroom asking rents drop 8.7% from last year to $2,380/month in October. The annual drop was tied with Oakville ($2,304/month; -8.7% y/y) for the third biggest drop. It’s also worth noting that Oakville is included in the same real estate board, making it a regional issue that can impact existing home sale prices in an investor-dominated sector.
Rents Are Still Rising In Some Cities, Especially Regions With Large Federal Government Workforces Ordered Back-To-Office
Not all cities have seen annual growth for 1-bedroom asking prices fall, but they all saw sharp year-over-year drops last month. Saskatoon’s annual growth is the fastest at 16% bringing the average price to $1,293 per month. However, prices also fell a whopping 1.5% in the month of October, indicating a fairly sharp shift in outlook.
A similar annual growth trend was observed in the highest growth cities that followed—Quebec City ($1,429/month; +10.9% y/y), and Regina ($1,296/month;+8.9% y/y). They also saw sharp monthly drops falling 3.9% and 2.5%, respectively. The former being the fastest decline across Canada last month.
Only four cities saw positive monthly growth—Laval ($1,672/month; +3.2% m/m), Niagara Falls ($1,698/month; +3.1%), Gatineau ($1,755/month; +0.9%), and Ottawa ($2,040/month; +0.2%). It was largely expected in these regions, since all of these markets have signficant Federal government employment.
Last month the Federal government implemented mandatory presence in office in an effort to bring workers back to the city and bolster real estate values. As a one-time event, it’s unclear if this will continue after the sudden shift or if these markets will cool similar to other cities.
At first glance, the sudden plunge is likely to be attributed to Canada’s sudden shift on immigration. Pursuing intentional population de-growth is certainly going to limit the demand curve and investors might need to reassess their thesis. However, the immigration policies were announced at the end of the month—after most listings were already posted. More likely expectations have been tapered, especially in cities like Toronto where rental vacancy began to explode higher before the Spring, rising above 2019-levels.
English (US) · 