Yardi Canada has released its 2024 multifamily report, analyzing aggregated and anonymized client data from 476,000 units across 5,400 Canadian properties. The report provides a detailed overview of Canada’s Q2 2024 apartment performance, revealing a slight cooling in the market despite sustained high housing demand relative to supply.
According to the data, key metrics like rent growth and vacancy rates have moderated from recent peaks but remain strong by historical standards. Meanwhile, Canada’s economic growth remains modest, with GDP rising at a 1.7 per cent annual rate in the first quarter, as per Statistics Canada, and the unemployment rate standing at 6.4 per cent as of June.
Supply and demand
In terms of new builds, Yardi reports that Canada delivered over 110,000 apartments in 2023, but not enough to meet the growing housing demand—a sign that more construction is needed. The in-place annual rent growth rate declined to 6.3 per cent, primarily due to limited housing supply and rising population growth. Overall, Canada’s average national vacancy rate rose to three per cent, the highest its been since Q2 2022. Yardi theorizes that renters are staying put longer due to the high cost of living, making moving less affordable.
“Canada’s apartment market is demonstrating signs of cooling, but remains fundamentally strong,” said Peter Altobelli, vice president and general manager of Yardi Canada Ltd. “While rent growth has begun to decelerate from its peak, it persists at a robust level due to ongoing supply constraints. The disparity between housing demand and available units continues to be a significant factor shaping the rental landscape.”
Apartment performance by locale
In-place rent growth was led by the prairie provinces, Alberta and Saskatchewan, which have been drawing households looking for more affordable markets in recent months. CMAs with the largest year-over-year in-place rent growth during Q2 2024 were Calgary (12.9%), Saskatoon (9.0%) and Edmonton (8.5%), which notably are all markets without rent control. In-place rents rose by less than 5 per cent in only two CMAs: Winnipeg (4.3%) and Vancouver (4.9%).
While apartment construction is not nearly enough to meet the demand of the growing population, completions did reach a multi-decade high last year, with multi-unit purpose-built rentals comprising a growing share of Canadian housing development. According to the Canada Mortgage and Housing Corporation (CMHC), Canada delivered 112,819 apartments in 2023, making up 60.1 per cent of the 187,630 housing units that came online. This marks a large increase from 2003, when 40,711 new apartments represented 28 per cent of all new housing, and from 2013, when 65,157 new apartments accounted for 45.5 per cent of all new housing. Meanwhile, the share of semi-detached and single-family housing has dwindled.
Working against the number of completions and impacting apartment performance, according to Yardi, are lengthening construction times from start to finish due to difficulties in securing construction financing, delays in obtaining municipal approvals in many jurisdictions, and a shortage of workers.
Apartment types
New lease rates in Q2 2024 were extremely consistent across bedroom types, with rents rising by 10.1 per cent for two-bedroom units, 10 per cent for bachelor units and 9.9 per cent for one-bedroom apartments. New leases rose 9.3 per cent for three-bedroom units, which typically have lower turnover.
“The high cost of homeownership is fueling rental demand, as some families cannot afford the cost of owning a home,” Yardi concluded.
For more detailed insights, download the full report here.
