Rising Rent Across Canada: What You Need to Know

Written by Posted On Friday, 21 April 2023 12:44
Rising Rent Across Canada: What You Need to Know Pexels.com, SevenStorm JUHASZIMRUS

Canada has been experiencing a significant rise in rent prices across the country, and it's causing financial strain on many individuals and families. 

A report from Rentals.ca provides an overview of the rental rates for apartments and condos in different cities and provinces across Canada for the month of April 2023. According to the report, the average monthly rent for all property types in Canada increased by 1.0% monthly and 10.8% annually to reach an average of $2,004 in March. The highest rent was observed in Vancouver, British Columbia, where the average monthly rent for a one-bedroom apartment was $2,743. Toronto, Ontario, had the second-highest rent, with an average monthly rent of $2,506. The lowest rent was observed in Lloydminster, Alberta, with an average monthly rent of $820. The report also provides a breakdown of the average rents by property type and bedroom type for each city and province.

Rent Report Graphic April 2023 v5.width 720

One reason for the rise in rent prices is the limited supply of rental properties, which is not keeping up with the high demand. This demand can be attributed to inflation, immigration, and an increasing population, which are all contributing to the pressure on the rental market. The annual federal immigration targets are expected to increase by 8% by 2025, which means that demand for rented accommodation is unlikely to decrease anytime soon. This is particularly concerning as Canada's homeownership rates have already reached a 30-year low, mainly due to affordability issues.

300K New Rental Units Needed to Prevent Severe Shortage

According to a report from Royal Bank of Canada, Canada's rental housing shortage will quadruple to 120,000 units by 2026 without a significant boost in stock. In order to reach the optimal vacancy rate of three per cent, the report suggested Canada would need to add 332,000 rental units over the next three years, which would mark an annual increase of 20 per cent compared with the 70,000 units built last year. The report estimated an existing deficit of 25,000 to 30,000 units of rental stock across Canada. The report also recommended turning condo units into rentals, converting commercial buildings, and adding rental suites to existing homes to help ease the pressure.

Rent Increases Are Outpacing Wages

The national average wage in Canada increased by 4.2% between 2021 and 2022, according to Statistics Canada data. Alberta had the lowest increase at 1.27%, while Quebec had the highest at 5.77%. There is no wage data for 2023 yet, but reports suggest that wage increases in 2023 will be similar to those in 2022. A survey of Canadian companies and organizations conducted in the summer of 2022 revealed that employers only expected to increase employee base pay by a national average of 4.2% in 2023.

Tips for Navigating the Rising Rent Market in Canada as a New Renter

As a new renter in Canada, you may be feeling overwhelmed by the current state of the rental market, with rising rent prices and a shortage of affordable units. However, there are steps you can take to navigate this challenging environment and find a rental that fits within your budget. Here are some tips and advice for new renters experiencing the issue of rising rent in Canada:

Research your options: Before you begin your search for a rental property, it's essential to research the rental market in your area. Take a look at the average rent prices for different types of units, and consider neighborhoods that are more affordable or have better vacancy rates. Online rental listing sites such as Bwalk.com can be great resource for finding available units and comparing prices across Canada.

Be flexible: Be open to different types of units, such as basement suites or shared accommodations, as they may be more affordable than a standalone apartment. Consider living outside of downtown areas, as rent prices tend to be higher in these areas.

Budget wisely: It's important to have a realistic budget in mind when searching for a rental. Take into account not only the monthly rent, but also utilities, parking, and other expenses. Be sure to factor in any potential rent increases over the course of your lease.

Negotiate your lease: Don't be afraid to negotiate your lease terms, especially if you have a good rental history or can offer to sign a longer lease. Ask if the landlord is willing to lower the rent or include utilities in the rent price.

Look for incentives: Some landlords may offer incentives to attract new renters, such as a free month's rent or a waived security deposit. Keep an eye out for these offers and take advantage of them if possible.

Consider roommate(s): Living with roommates can help to reduce the cost of rent, as you can split the cost of rent and utilities. Be sure to choose your roommate(s) carefully, and establish clear rules and expectations before moving in together. Use websites like Roomies.ca that have clearly defined safety protocols in place. 

Be prepared: When you find a rental that you're interested in, be prepared to act quickly. Bring all necessary documents, such as proof of income and references, to show that you're a reliable tenant. Be ready to sign the lease and provide a security deposit if necessary.

In conclusion, while the rising rent prices in Canada can make it challenging for new renters, there are steps you can take to find an affordable rental that fits your budget. By researching your options, budgeting wisely, and being flexible and prepared, you can find a rental that meets your needs without breaking the bank.

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