Canada’s average asking rent has reached a new bottom, tumbling 2.8% year-over-year in February, helping to restore affordability to levels not seen in years.

Rents have declined on an annual basis for the 17th consecutive month, falling by 1.3% from January to February, according to the latest data from Rentals.ca and Urban Nation.

Over the past two years, rents have fallen by 7.4% from February 2024, but remain 2.3% higher than in February 2023.

Average rents for all unit types continued to fall across the most populous provinces, down 4.9% in BC, 4.7% in Ontario, 4.6% in Alberta and 3.1% in Quebec. Manitoba was the most populous province to see an increase in average asking rents (+1.3%).

However, rents rose month-over-month in the key markets of Vancouver, Ottawa, Calgary, Edmonton and Montreal.

Wages Come More Into Balance with Rent Prices

As rents continue to soften and average wages show moderate gains, the affordability of rent as a percentage of renter household income has continued to improve.

The average rent in February accounted for 29% of average renter household income, down from 31% a year ago and 34% two years ago, and below the standard 30% affordability benchmark.

“While asking rents remain above pre-pandemic levels, wage gains have outpaced asking rent increases over a six-year period, resulting in an overall improvement in affordability for Canadian renters,” reads the report.

North Vancouver Remains Most Expensive Rental Market

With a slight increase in apartment asking rents compared to January, North Vancouver ($2,926) remained the most expensive rental market in the country last month.

Other BC markets in the top five (excluding the six largest markets) were Richmond ($2,558), Burnaby ($2,511) and Coquitlam ($2,491). The most expensive rental market in Ontario (other than Toronto) was Pickering ($2,633).

Halifax ($2,268), the most expensive market in Atlantic Canada, continued to rise in the national list, overtaking Kingston ($2,254) and East York ($2,243).

Among the most affordable large cities (top 25 most populous) in the country were Regina ($1,379), Saskatoon ($1,441) and Quebec City ($1,447).

Condo Rents Slide Further

Condos once again saw the steepest decrease in asking rents across property types, falling 5.1 year-over-year to an average of $2,082. Other secondary market units fell 4.5% annually to an average of $2,009, while purpose-built rental apartments remained the most resilient, down 1.9% from last year to an average of $2,030.

One-bedroom rents decreased 3.5% to an average of $1,781, while three-bedroom units remained the only unit type to register rent growth, with rents rising 0.6% annually to an average of $2,486.

Rent Per Square Foot Remains Flat

Average asking rent per square foot remained flat year-over-year at $2.53, but declined 4.2% from February of 2024, when asking rents averaged $2.64 per square foot.

In the past two years, the average size of rental units has fallen 6.3% to a low of 826 sf.

Report : Canada Turns A Corner on Rent Affordability by REM Real Estate Magazine