Canadian Rents Surged 20%, But the BoC Can’t Explain How It Started

Rental prices in Canada have been driven by more than just population growth. A new Bank of Canada (BoC) research paper breaks down the factors that can explain the recent surge in 1 bedroom rents from 2020 to 2026. They found that financing costs made a big contribution to higher rents, especially when rates began rising. However, the researcher still couldn’t determine what drove the initial surge at the start of 2020, before the drivers we all accept as the reason, began to appear. Canadian Asking Rents Have Surged Over 20% Since 2021 Canadian asking rents have surged over 20% since 2021, according to the researchers. Looking at what landlords were asking for a one-bedroom apartment across a nine-city series shows a roughly 27.3% increase from Q4 2021 to Q4 2023. It’s followed by a contraction that ran until Q2 2026, but prices remain 21.0% higher than they were in Q4 2021. As we all know, the distribution—and partial correction—varied widely by region. As BoC researcher Benjamin Straus writes, “asking rents rose sharply in nearly every major city, notably in Halifax, Québec and Calgary.” From Q4 2021 to Q4 2023, the index shows the sharpest climbs in Calgary (+45.1%), Halifax (...