Ontario Construction News staff writer
The pace of rent increases slowed in 2024 as Canada’s supply of purpose-built rental apartments grew by 4.1per cent, the highest increase in more than thirty years. The growth in supply pushed the national vacancy rate to 2.2 per cent from a record low of 1.5 per cent in 2023, according to the Canada Mortgage and Housing Corp.’s Rental Market Report.
The annual report says the average rent growth for a two-bedroom apartment rose 5.4 per cent from a record eight per cent in 2023. For new tenants, however, rent growth was 23.5 per cent in 2024, unchanged from 2023.
The agency said affordability remained “strained,” despite the upswing in rental stock since the increase was driven by higher-priced units being completed. It added that rent hikes on turnover units accounted for more than 40 per cent of the overall rent increase in 2024.
The rented condominium apartment market also remained tight in 2024. The average vacancy rate for rented condominiums in the 17 census metropolitan areas (CMAs) surveyed by CMHC was 0.9 per cent in 2024, unchanged from 2023, and down from 1.6 per cent in 2022. Average two-bedroom rent was up to $2,173 in 2024 from $2,049 in 2023.
“Affordability for Canadian renters remains a challenge, particularly for new tenants who faced significant rent hikes as units turned over, limiting mobility for existing tenants and making it harder for prospective tenants to enter the market,” said Tania Bourassa-Ochoa, the CMHC’s deputy chief economist.
“However, record growth in rental supply helped slow down average rent growth and raise vacancy rates closer to the historic average, underscoring the critical role of added supply in improving housing affordability.”
Toronto had the lowest rent growth among major CMAs at just 2.7 per cent, down from 8.8 per cent in 2023 thanks to rising vacancy rates and the lowest turnover rate of the major CMAs. With a record increase in rental supply, the report says landlords prioritized tenant retention by taking a more cautious approach to rent increases.
In Montréal, rental apartment completions remained among the highest on record while in Vancouver rental supply grew at a slower pace than the previous two years but still above historical rates. In both markets high demand meant rent growth didn’t slow as much as it did in Toronto.
While Calgary’s rent growth slowed it still outpaced all other large urban centres due to strong demand for rentals, driven by migration-led population growth and stable economic conditions, despite higher unemployment.
In Halifax, strong rental supply growth and slower population growth relieved some of the pressure in the rental market, with the vacancy rate rising 2.1 per cent this year. Average rent growth saw the largest year-over-year decrease of the major markets, down to 3.8 per cent in 2024 from 11 per cent in 2023.
Rent growth in 2024 accelerated slightly in Ottawa and Edmonton, driven by higher rent increases for new tenants at turnover and in newly completed units entering the market.
