1 week Ago By The Canadian Press
For Canadian renters, it may feel like the years since the COVID-19 pandemic have brought one hit after another. After a 4.6 per cent increase in the average asking price of a rental unit in 2021, monthly payments surged 12.
1 per cent year-over-year in 2022, according to data from Rentals.ca and Urbanation. Then in 2023, asking rents increased by an average of 8.
6 per cent. However, experts say the rental market across the country seems poised for a cool-down in 2025 as more supply opens up and some look to buy their first home. Whether various regions experience outright declines in rents or simply decelerate in their growth, the rapid increases of recent years are unlikely to continue in 2025.
"This comes after record-breaking growth in 2022 and 2023. Rental prices are so expensive, like, they've blown up," said Rentals.ca spokesperson Giacomo Ladas.
But data from his platform shows a turnaround is already underway. Average asking rents fell 3.2 per cent nationally to $2,109 in December year-over-year, marking a 17-month low.
"What we're seeing is tons of movement. Incentives are now coming back into units." October marked the first month in three years in which the asking rent for units across Canada fell, RBC economist Rachel Battaglia said in a report, led by declines in the two most expensive cities: Toronto and Vancouver.
"We're at a little bit of a turning point," Battaglia said in an interview. Experts point to a number of factors at play. On the demand side, economic and labour challenges have meant fewer people are seeking new rentals.
"People have been trying to stay put," said Tim Hill, a real estate agent with Re/Max All Points Realty in Vancouver. "If they didn't have to, a lot of people just simply weren't moving. If they had a good monthly rent, they were staying there for as long as they possibly could.
" Subdued demand is also likely to come from slowed population growth after the federal government reduced immigration targets. "Newcomers do make up a disproportionately large share of renters," Battaglia said. "Not only that, but we have a weakening labour market too, which could be bringing more households to bundle or delay that move out into rental housing .
.. I suspect there are fewer younger individuals moving out of their parents' house into rentals, or maybe they're rooming with others.
" TD economist Rishi Sondhi predicts purpose-built rent growth will ease to a range of three to four per cent this year..
