Canada saw a record increase in rental supply in 2024, but affordability remained out of reach for the average renter.

The Canada Mortgage and Housing Corporation (CMHC) reported a significant slowdown in rent growth in 2024 as the country experienced its largest increase in purpose-built rental supply in over three decades.

Despite this, affordability challenges persist. The CMHC highlighted that the new rental stock predominantly consists of high-priced units, many beyond the reach of the average renter.

In its annual survey conducted in October, the federal housing agency noted a slight improvement in the vacancy rate for purpose-built rental apartments, which rose to 2.2% from a record low of 1.5% in 2023. However, the average rent for a two-bedroom purpose-built unit increased by 5.4% to $1,447—lower than 2023’s 8% rise but still significant.

The report distinguishes between actual rents paid by tenants and higher asking rents for vacant units. For example, the average asking rent for a two-bedroom purpose-built unit last month was $2,294, according to Rentals.ca and Urbanation.

The CMHC also noted that rents surged by 23.5% when units turned over, contributing to over 40% of the overall rent increase in 2024. The country’s purpose-built rental stock grew by 4.1% year-over-year, marking the largest expansion in more than 30 years.

“Affordability for Canadian renters remains a challenge, particularly for new tenants facing significant rent hikes,” said CMHC Deputy Chief Economist Tania Bourassa-Ochoa. “Record growth in rental supply helped slow average rent growth and brought vacancy rates closer to historic averages, highlighting the importance of added supply in addressing affordability.”

The average rent for two-bedroom condominiums remained high at $2,199, with their vacancy rate unchanged at 0.9%.

City-Specific Trends

• Toronto: Rent growth slowed to 2.7%, down from 8.8% in 2023, as vacancy rates rose and turnover rates declined. Increased supply led landlords to take a more cautious approach to rent increases.
• Montreal: Rental completions reached near-record levels, raising vacancy rates but maintaining strong demand.
• Vancouver: While supply growth slowed compared to previous years, it remained above historical norms, with demand keeping rent growth steady.
• Calgary: Rent growth slowed but remained the highest among major cities, driven by population growth and economic stability.
• Halifax: Strong supply growth combined with slower population increases led to higher vacancy rates and the steepest drop in rent growth among major markets.
• Ottawa and Edmonton: Both cities saw slight rent growth acceleration due to higher turnover rent hikes and new unit completions.

The report underscores the critical role of increasing rental supply in moderating rent growth and easing affordability pressures, though challenges remain for renters navigating high turnover costs and limited mobility.