Rent is projected to rise by another 5% in 2023
Average rent increased by 10.9% in 2022, report shows
Shantae Campbell
Financial Post
Condo buildings in Liberty Village neighbourhood in Toronto. Photo by Carlos Osorio/Reuters files
Canadians faced an average annual rent increase of 10.9 per cent in 2022, with another five per cent increase forecast for 2023, according to year end data from Urbanation and Rentals.ca.
Average monthly rent for December was up 12.2 per cent at $2,005 on a year-over-year basis, according to the groups’ monthly rental report. That marked a slight decline from November.
Out of the 35 cities surveyed, Vancouver had the highest monthly rent for December, with a year-over-year increase of 16.8 per cent for one-bedroom units and 17.9 per cent for two bedrooms, with average rents of $2,596 a month and $3,562 a month, respectively.
Toronto claimed second place as the most expensive monthly rent with a year-over-year increase of 21.3 per cent ($2,457) for a one-bedroom unit and 18.1 per cent ($3,215) for a two-bedroom unit.
Calgary finished third with an average year-over-year increase of 22.6 per cent to $1,816 per month for purpose-built and condominium apartments.
As for apartment and condo rentals in December, Ottawa and Edmonton ranked fourth and fifth, with annual increases of 14.5 per cent and 11.7 per cent, respectively, while Montreal’s average rent increased by only 6.6 per cent.
Higher borrowing costs have kept rental demand strong in the face of falling supply, Shaun Hildebrand, president of Urbanation said in the report.
“The Canadian rental market had one of its strongest years ever in 2022, more than reversing any weakness experienced during the pandemic,” Hildebrand said. “Rental demand is primarily being driven by a quickly growing population that is finding it increasingly more difficult to afford homeownership or find suitable rental housing. Looking ahead for 2023, rents are expected to continue rising, but less heated growth can be expected as the economy slows and new rental supply rises to multi-decade highs.”
According to the report, It is expected that rents will increase at a more moderate five per cent in 2023, as economic and employment conditions begin to soften after the rapid rise in interest rates and record breaking rents.
The annual rent increase figure of 10.9 per cent was determined by taking the weighted average for rents across all 12 months of 2022 and dividing over the weighted average rents across all 12 months of 2021,
Rentals.ca said.
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