Asking rents reach new high in Canada, as Toronto prices stay relatively flat

Toronto's rental prices were relatively flat last year, while asking rents across Canada hit a record high in December, a and Urbanation analysis has found. After annual rent increases of more than 20 per cent in 2022, asking prices for apartments in major markets such as Toronto "slowed considerably" last year, according to the report released Monday.

At an average of $2,832, the asking price for a rental unit in Toronto climbed just 2.1 per cent in December from a year earlier, and dropped monthly from $2,913 in November and . The winter months are generally a slower period for the rental market, so the recent reduction in average monthly rents is not completely surprising, said Shaun Hildebrand, president of real estate research firm Urbanation.

“The slowdown has been pronounced, perhaps more than normal, because of the exceptionally strong run up in rents that we saw during the spring and summer when there was a surge in the population, mainly driven by non permanent residents,” he told the Star. Broken down by housing type, studio apartments in Toronto saw the biggest increase with the average listing up 5.2 per cent year over year to $2,048.

Larger units weren't too far behind, with the average two bedroom rising 3.8 per cent to $3,345 and three bedrooms up 3.1 per cent to $3,843. The average one bedroom cost 2.4 per cent more at $2,536. Renters are increasingly opting for smaller, more affordable units, which are often outside the city and are shared amongst a couple or roommates, said Hildebrand.

“It’s becoming increasingly common to the point where most rental units are being rented by couples and roommates, just because it's easier to absorb today's rents when you're sharing it amongst more than one person,” he said. Nationally, the average asking rental price in December reached a record high of $2,178, relatively flat from the month earlier but rising 8.6 per cent year over year, according to the report.

It said asking rents in Canada have increased by a total of 22 per cent, or an average of $390 per month, over the last two years. Vancouver leads the way as Canada's most expensive city for rent, with the average rent for a one bedroom sitting at $2,700 and a two bedroom at $3,660, followed by nearby Burnaby, and Toronto in third.

Toronto’s suburbs continue to see significant growth in asking rents, with East York seeing the second largest increase in rental prices in Ontario in December, jumping 12.2 per cent year over year to an average of $2,460. Waterloo saw the largest increase in an annual growth of 14.4 per cent. “If you’re having to commute into the core for school, or work and can't afford downtown rents, you'll move increasingly outside of the core,” said Hildebrand.

“East York sort of borders the core of Toronto, but offers a significantly lower (average) rent.”.