Average residential rents in Canada are closing in on their pre-pandemic peak, with the median rent reportedly hovering at $1,800 per month in July—up from $1,750 in June  and up 9 per cent from a year ago. According to the latest Rent Report, workers returning to the office are boosting rents in the most expensive central markets in Canada, bringing more competition for apartment-seekers in the downtown cores.

“The 2.6 per cent monthly increase in average rents in Canada is the second highest monthly jump in three years, topped only by the 3.8 per cent rise in May 2022,” said Ben Myers, president of Bullpen Research & Consulting. “Rents were boosted by rent growth of 20 per cent and higher in several major municipalities in Canada, and double-digit growth in a number of the most affordable rental markets, such as Red Deer and Saskatoon.”

Rising interest rates are hitting potential homebuyers with a double whammy of higher mortgage rates, along with the worry of future price declines devaluing their investment. Higher interest rates are also keeping would-be home sellers from listing their properties, which ultimately leads to higher demand in the rental market.

Additionally, immigration remains elevated, and the unemployment rate nationwide remains near historic lows, so despite some recession fears, rental market demand remains strong.

Residential rents by city

Data from the latest survey shows Victoria had the highest year-over-year increase of 27 per cent for all property types in July at $2,667. Hamilton average rents were up 26 per cent this year, rising to $2,097 after being down 13 per cent last July. Kitchener came in third with an increase of 25 per cent, rising to $2,108 since July 2021.

Meanwhile, Burnaby, Toronto and London average residential rents all rose 24 per cent in July to $2,680, $2,691 and $2,036 respectively. Mississauga, Calgary, Vancouver, and Red Deer all experienced double-digit rent increases, rising by 19 per cent, 18 per cent, 16 per cent, and 13 per cent. Halifax, Kingston and Saskatoon average rents all increased by 11 per cent since July 2021. Of the 18 municipalities, only Winnipeg’s average monthly rents declined (by 1 per cent) to $1,377, although they’d reportedly risen by 13 per cent in July 2021 to $1,385 per month.

Vancouver once again topped the list of 35 cities for average monthly rent, with one-bedroom homes going for $2,500 and two bedrooms going for $3,630. Toronto finished fourth on the list while Montreal came in 24th.

Other key takeaways:

• The most expensive units listed on Rentals.ca were single-family homes at $3,043 per month on average in July, an increase of 14.1 per cent year over year. Since January, the average rent for single-family homes has increased by $391.
• Condos for rent have a significant premium over apartments, with one-bedroom units in BC currently going for 41 per cent more than one-bedroom apartments.
• With higher home prices and higher interest rates helping to increase demand in the rental market, some investors are seeing this as an opportunity to rent out more single-family properties.