Canadian Rent Growth Slows, September Sees 2.1% Increase

Last updated: 2025/01/26 at 12:33 PM

Irfan Ameer

8 Min Read

Have you noticed rents aren’t rising as fast as they used to? Well, the latest numbers are in, and it turns out Canadian rent growth slowed down in September.

Contents

Why Is Rent Growth Slowing Down?Which Areas Are Seeing the Biggest Changes?What Does This Mean for Renters?How Does This Affect Landlords?What’s Next for the Canadian Rent Market?Final Thoughts

Rents went up by just 2.1% compared to last year. This is the slowest rent growth we’ve seen since October 2021.

While that’s still an increase, it’s a big change from the sharp hikes we’ve been seeing. For many renters, this might be a bit of relief. But what’s causing this slowdown, and what does it mean for the future of renting in Canada? Let’s break it down.

Why Is Rent Growth Slowing Down?

The main reason rent growth is slowing has to do with a drop in foreign student enrollments. Many international students who usually rent in Canada didn’t return at the same rate this year. Shaun Hildebrand, president of Urbanation, says foreign student enrollment is down by about 50% from previous record highs. Fewer students looking for housing means less demand for rentals, which is helping slow down the increase in prices.

In May, rents were growing at a rate of 9% year-over-year. By September, that number had dropped to 2.1%. This is the fifth straight month rent growth has slowed. But even with this drop, rent is still much higher than it was a few years ago. For example, rent prices are 13.4% higher than they were two years ago and a whopping 25.2% higher than three years ago.

So while rents aren’t rising as fast, they’re still much higher than what many Canadians were paying just a couple of years ago.

Which Areas Are Seeing the Biggest Changes?

Some parts of Canada are seeing bigger changes in rent prices than others. For instance, in Ontario, the average rent for purpose-built apartments and condos dropped by 4.3%, bringing the average rent to $2,380. British Columbia saw a similar trend, with a 3.2% drop, bringing average rents to $2,570.

On the flip side, Saskatchewan saw a huge jump in rent prices. Rents there shot up by 23.5%, making it the province with the fastest-growing rent prices in Canada right now. That’s a sharp contrast to what’s happening in Ontario and B.C.

When we look at the major cities, rents dropped in Vancouver, Toronto, Calgary, and Montreal. But Ottawa saw a slight increase. Interestingly, more people are choosing to live in shared accommodations to save money. The price for shared spaces has gone up by 6.9% over the past year, showing that more renters are teaming up to make living costs more affordable.

What Does This Mean for Renters?

If you’re a renter, the slowdown in rent growth might seem like good news. But it doesn’t mean rent is getting cheaper. In fact, the overall cost of renting is still high, especially in the big cities. While rents aren’t rising as fast as they were, they’re still much higher than they were just a few years ago.

One big issue is the lack of affordable housing. Over the past decade, Canada has lost over 500,000 affordable rental units. That’s a huge number. Experts say part of the reason for this is that large investment companies, often called “financialized landlords,” are buying up housing units. Instead of renting them out at affordable prices, they’re turning them into high-end rental properties or using them as investments. This makes it harder for regular Canadian rent to find affordable places to live.

So even though rent growth has slowed down, the root problem—too few affordable homes—still exists. Without more affordable units being built, it’s possible that this slowdown won’t last long.

How Does This Affect Landlords?

For landlords, this slowdown in rent growth means they might not be able to raise rents as much as they have in recent years. Some landlords may need to offer better deals or upgrade their units to attract tenants, especially in areas where rents are falling, like Ontario and B.C.

At the same time, demand for rental units remains strong in many parts of the country, especially in urban areas. Even though rent increases have slowed, landlords can still expect to see steady demand for housing. However, they might need to rethink how they price their units, especially as more people start looking for shared accommodations to cut costs.

What’s Next for the Canadian Rent Market?

Looking ahead, it’s hard to say whether rent growth will continue to slow down or if it will pick up again. A lot depends on how quickly Canada can address its housing shortage. If more affordable homes are built, it could help keep rent prices from rising too quickly. But if the housing supply continues to lag behind demand, we could see rent prices start to climb again.

Inflation and interest rates could also play a big role in what happens next. High inflation and rising interest rates make it more expensive to buy a home. When people can’t afford to buy, they’re more likely to rent. If more people start renting because they can’t buy, demand for rentals could go up again, leading to higher prices.

Final Thoughts

The slowdown in Canadian rent growth is a notable change. For renters, it might offer a bit of relief after years of steep rent hikes. But the cost of renting is still high, and the long-term solution to Canada’s rental crisis will likely depend on building more affordable housing.

If you’re a renter, it’s important to stay informed about the latest rental trends and think carefully about your housing options. And if you’re a landlord, now might be a good time to consider how you can stay competitive in a market that’s cooling off.

As always, keep an eye on the market and make sure you’re prepared for any changes that might come your way. Rent prices might not be rising as fast, but they’re still a big challenge for many Canadians.