Average and median rental rates for all property types in Canada have risen for a third consecutive month as demand increases with the arrival of the prime spring leasing season, reports Rentals.ca and Bullpen Research & Consulting.
The average property listed on Rentals.ca in February was offered for rent at $1,888 per month in Canada overall, an increase of 1.8 per cent monthly from $1,854 in January. The median rent was $1,800 per month, up from $1,747 in January.
Ontario continues to hold on to the top spot for average and medium asking rents by province with an average rent at $2,197 per month and a median price at $2,100. Average and median asking rents for Ontario are about $1,000 more than the provinces of Quebec ($1,209 and $1,020), Manitoba ($1,159 and $1,076) and Saskatchewan ($1,168 and $1,150).
Newfoundland remains the only province in the three-figure range for average and median rents at $883 and $840.
Other takeaways from the February rent report:
Average rental rates continue to climb in Toronto, despite affordability concerns. A number factors have contributed to the increase in rental demand including: Rising resale condo prices, tighter mortgage credit availability, expanded rent control, reduced-unit turnover, and high population growth.
More than 10,000 apartments have been built in the Toronto CMA over the past six months (condo and rental), which has not dampened rent growth yet. The metro area likely needs closer to 30,000 units annually to satisfy demand, and that level of growth isn’t likely to happen in 2019.
In Ottawa, nearly 65 per cent of Rentals.ca listings in February were available from $1,000 to $1,999 per month. About 22 per cent of the rental apartment market is comprised of one-bedroom units available from $1,000 to $1,999 per month and 20 per cent of the market is made up of two-bedroom units available in the same rent range.
Landlords are asking $2,430 per month on average for condos in Canada, which are smaller on average than the older rental apartments at 758 square feet. Leasing of condo apartments is much more prevalent in Toronto, which contributes to the high national rental rate for these smaller units.
To rent a one-bedroom condo in Toronto ($2,416), a tenant will need to shell out about $350 more than in North York and Etobicoke on average. For a two-bedroom unit, a tenant looking in Toronto ($2,934) will need about $400 more on average than in North York and Etobicoke. The biggest difference is in the asking rents for three-bedroom units, where North York and Etobicoke suites are larger than Toronto by over 150 square feet, but the asking rental rates for the Toronto units are over $1,000 per month more on average.
“Less than stellar national economic data will likely put any interest rate hikes on hold for the remainder of the year, and several lenders are reducing their mortgage rates, which may induce some prospective buyers to purchase a home and relieve some pressure on the rental market,” said Ben Myers, president of Bullpen Research & Consulting.
“The pause in interest rate hikes is good news for tenants, as rent growth nationally in 2018 was the highest since 1991 according to CMHC figures,” Myers added, “And listings on Rentals.ca over the past several months show that rental rates continue to rise rapidly in 2019.”