Rental housing supply across the nation surged in 2022 but demand outpaced growth – leading to skyrocketing prices, record-low vacancy rates and less mobility.

Approximately 55,000 purpose-built rental units hit the market between October 2021 and October 2022 – the strongest rate of increase since 2013. However, those extra units did very little to flesh out available rental supply, as vacancy rates dropped to an all-time low of 1.9% over the course of the year.
The Canada Mortgage and Housing Corporation (CMHC) cites several reasons for the surge in rental housing demand :

1. Increased immigration
2. Homeownership becoming less affordable
3. Students returning to on-campus learning in major metropolitan areas

According to the Canada Mortgage and Housing Corporation (CMHC), the national average rent for a two-bedroom apartment was $1,258 in 2022 – up by 5.6% from last year, and well above the average increase of 2.8% seen between 1990 and 2021.

Toronto and Vancouver are the most expensive markets in the country, with average rents of $1,779 and $2,002 respectively.

Low-income renters were affected the most by the sudden upticks in rental prices. Affordable rental units are hard to come by – accounting for much less than 20% of the available rental stock.

As rental prices surged across the country, more tenants decided to stay put in order to avoid higher costs. Rental turnover rates decreased to 13.6% in 2022 from 15.5% in 2021.

These figures aren’t surprising, considering CMHC’s evidence that turnover has a huge effect on the price of rental housing. Per the firm, the average rent increase for a 2-bedroom apartment that turned over to a new tenant was around 18.3% – whereas tenants who chose to stay in their rental units only faced rent increases of 2.6%t.

In 2022, Montreal had the largest share of affordable rental units, mostly due to its older and smaller structures, larger overall rental stock and possibly more individual owner-landlords.

Rental condominiums made up 19.3% of the total rental stock across Canadian cities, with Vancouver leading the charge at 42.5%condominium rental stock.

Calgary and Toronto also showed high levels of condo rentals (over 30%), while Montreal boasted a modest 6.7%.

The average cost of a two-bedroom condo rental was much more expensive than the average apartment, clocking in at $1,930 per month.

Canadian Rental Supply Can’t Keep Up with Demand, Leads to Surging Prices & Low Availability by Cassie Apperloo | Livabl