The average annual rent for vacated units in Canada rose 6.5 per cent in May, marking the lowest annual increase since December 2021, according to new data from Rentals.ca  and Urbanation. That said, rents are expected to continue to climb in 2023 to align with rising immigration, as Canada plans to welcome 465,000 new residents , and as buying a home becomes more expensive.

“Higher rents are on the horizon with interest rates at a 22-year high, rising home prices and record immigration,” said Matt Danison, CEO of Rentals.ca Network. “Gen Z could become the ‘Boomerang Generation’ moving back in with the parents or the ‘Roommate Generation’ splitting rent as it’s unaffordable for many Canadians to pay rent on their own. Governments at all levels need to come up with creative solutions to increase housing supply.”

“The rental market is expected to heat up further as it enters the seasonal peak for demand during the summer months, driven primarily by an incoming surge in international students and continued deterioration in homeownership affordability as interest rates move higher again,” added Shaun Hildebrand, president of Urbanation.

Vancouver once again topped the list of 35 cities for priciest rents in May, where one-bedroom homes averaged $2,831 and two-bedroom homes averaged $3,666. Year over year, average monthly rent in May for a one-bedroom in Vancouver was up 16 per cent and up 8.7 per cent for a two-bedroom.

Toronto finished second on the list of cities with highest rents for one-bedroom units ($2,538) and third for two-bedroom units at $3,286. Year over year, average monthly rent in May for a one-bedroom in Toronto was up 17.5 per cent and up 12.4 per cent for a two-bedroom.

Montreal came in 26th for one-bedroom homes at $1,657 and 20th for average monthly rent for a two-bedrooms at $2,172. Year over year, average monthly rent in Montreal in May for a one-bedroom was up 6.8 per cent and up 8.1 per cent for a two-bedroom.

Other key takeaways

• In Vancouver and Toronto, roommate rents were well above $1,000 in May, averaging $1,433 in Vancouver and $1,299 in Toronto. In Ottawa, the average roommate rental in May was $947; in Montreal; the average was $930; in Calgary, roommate rentals averaged $843 in May and in Edmonton, the average roommate rental was $712.
• Year over year, average rents for purpose-built and condominium apartments slowed to 7.3 per cent in May from 10.1 per cent in April. For one-bedroom purpose-built and condo apartments, rents averaged $1,770 in May, and two-bedroom rents averaged $2,127.

For the full report, click here: Rentals.ca June 2023 Rent Report