The average rent in Canada reached a high of $2,078 in July, according to a new report from Rentals.ca and Urbanation.
This is an increase of 8.9% from the same month last year, and the highest rate of growth reported in three months.
The report also found that rent also rose by 1.8% from June to July, the largest monthly jump in the last eight months. Compared to July 2020, the average asking rent was up by 21%, or $354 extra per month.
The report cited several factors behind the rising rents, such as the high demand from post-secondary students who are looking for housing before the fall semester, the influx of new residents and worsening affordability of home ownership as interest rates have increased.
“Canada’s rental market is currently facing a perfect storm of factors driving rents to new highs,” said Shaun Hildebrand, president of Urbanation.
“These include the peak season for lease activity, an open border policy for new residents, quickly rising incomes, and the worst ever home ownership affordability conditions.”
This is the second month in a row where prices have edged even higher.
Rental.ca’s June report found a 1.4% increase in rents from May.
“The 1.4% increase in rents from May represented the fastest month-over-month increase so far this year, causing the annual rate of rent inflation to accelerate to 7.5% from the 6.5% annual rate recorded in May,” wrote Rentals.ca.
“Annual rent inflation in June remained below the double-digit growth experienced during most of 2022 and early 2023. However, additional upward pressure on rents occurred as the population expanded at a record pace, the unemployment rate remained near a record low, and homebuyers became more cautious with more interest rate increases.”
The Bank of Canada hiked its overnight rate to a 22-year high in July as it continues to try to meet its 2% inflation mandate by curtailing consumer spending.
While the BoC credits the surge of newcomers to help with labour shortages across the country, it states immigrants are adding to the demand for housing.
“Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing,” wrote the central bank in a news release on Wednesday.
