Rental housing supply across the nation surged in 2022 but demand outpaced growth – leading to skyrocketing prices, record-low vacancy rates and less mobility.
Approximately 55,000 purpose-built rental units hit the market between October 2021 and October 2022 – the strongest rate of increase since 2013. However, those extra units did very little to flesh out available rental supply, as vacancy rates dropped to an all-time low of 1.9 per cent over the course of the year.
The Canada Mortgage and Housing Corporation (CMHC) cites several reasons for the surge in rental housing demand:
- Increased immigration
- Homeownership becoming less affordable
- Students returning to on-campus learning in major metropolitan areas
According to the Canada Mortgage and Housing Corporation (CMHC), the national average rent for a two-bedroom apartment was $1,258 in 2022 – up by 5.6 per cent from last year, and well above the average increase of 2.8 per cent seen between 1990 and 2021.
Toronto and Vancouver are the most expensive markets in the country, with average rents of $1,779 and $2,002 respectively.
Low-income renters were affected the most by the sudden upticks in rental prices. Affordable rental units are hard to come by – accounting for much less than 20% of the available rental stock.
As rental prices surged across the country, more tenants decided to stay put in order to avoid higher costs. Rental turnover rates decreased to 13.6 per cent in 2022 from 15.5 per cent in 2021.
These figures aren’t surprising, considering CMHC’s evidence that turnover has a huge effect on the price of rental housing. Per the firm, the average rent increase for a 2-bedroom apartment that turned over to a new tenant was around 18.3 per cent – whereas tenants who chose to stay in their rental units only faced rent increases of 2.6 per cent.
In 2022, Montreal had the largest share of affordable rental units, mostly due to its older and smaller structures, larger overall rental stock and possibly more individual owner-landlords.
Rental condominiums made up 19.3 per cent of the total rental stock across Canadian cities, with Vancouver leading the charge at 42.5 per cent condominium rental stock.
Calgary and Toronto also showed high levels of condo rentals (over 30 per cent), while Montreal boasted a modest 6.7 per cent.
The average cost of a two-bedroom condo rental was much more expensive than the average apartment, clocking in at $1,930 per month.