The average monthly asking rent for Canada rose 4.3 per cent year-over-year at the end of December, according to a report from Rentals.ca and Bullpen Research & Consulting.
The three largest cities experienced significant rent increases in 2019 for all property types listed on Rentals.ca: Toronto at nine per cent; Montreal at 25 per cent and Vancouver at 11 per cent.
The report says young tenants in all three municipalities are looking for walkable downtown communities where they can live without the expense of owning and parking a car – and without a crippling commute. To deal with affordability, young professionals are squeezing into smaller units and living with roommates well into their 30s.
Rental affordability is expected to get worse in 2020 in Ontario and British Columbia, despite an increase in new rental apartment construction, and the crackdown on empty units and AirBnB in several markets, says the report.
Rentals.ca is forecasting more modest rental growth in 2020 versus 2019, but the expectation is average rents will grow faster than inflation in most major markets outside of Alberta and Saskatchewan. The company’s recently published 2020 Rental Market Predictions report forecasts Canada’s average rental rates will increase three per cent year over year.
With Bullpen Research & Consulting, Rentals.ca also forecasts annual rental rates could increase in 2020 by as much as seven per cent in Toronto, five per cent in Montreal, four per cent in Ottawa and three per cent in Vancouver.
In the January report, Toronto had the priciest average monthly rent of the 30 cities on the list for a one-bedroom home at $2,299 and for a two-bedroom at $2,914.
St. John’s had the lowest average monthly rent of the 30 cities for a one-bedroom home at $885, and Lethbridge finished with the most affordable average monthly rent for a two-bedroom at $1,022.
The average rent for Canadian properties listed on Rentals.ca in December 2019 was $1,854 per month, a decrease of 3.3 per cent monthly (even with an annual increase of 4.3 per cent).
Rentals.ca partner Local Logic provided insights for renters lifestyle interests and found many millennial families want more than anything to live near a quality school.
“As more families continue to rent as opposed to buy, we see renters for larger homes are willing to sacrifice their ability to take transit or walk to get their groceries in favour of being near a quality school,” says Vincent-Charles Hodder, CEO of Local Logic. “We expect the rental markets to perform strong in areas close to schools in 2020.”